Need some pointers!

[CDOs]

Hi David,

I am a brand new rookie that just heard about the FRM certification a few months ago; and as I was picking the brain of a few co-workers who have either passed the exam or planning on taking it, your Bionic Turtle curriculum was the first thing every last one of them suggested me to visit. As I looked through your site I am amazed with how detailed and knowledgeable you are, and your dedication on reading every post and answering every question with detailed and to-the-point precision.

I have a few beginner's questions I would love to hear your opinions on, and I think it will help if you know my background a little bit. I currently work in Structured Finance for one of the big four accounting firms doing analytic work, concentrating mainly on CDOs (yes, the very same financial product that arguably brought on this financial tidal wave), CLOs, and Synthetics. I recently purchased a 2nd edition of the FRM Handbook online and after skimming through it, along with your helpful highlighted version of the 2009 Study Guide, I gotta say this exam looks very challenging yet comprehensive, and I believe it can help me sharpen the skill set I need on a day to day basis. However I do have the following questions, and sorry if any of these questions have already been asked:

1. I believe my experience in this field should satisfy the 2-year requirement for the certification, do you know if there is any way to find out for certain?

2. I see that the study guide included many reference textbooks, should I be purchasing all these materials? Do I need to pay as much attention to these textbooks compared to the handbook? And will your product include all these topics in depth as well?

3. Hate to bring back the topic of FRM v.s. PRM, but do you think the change in format of the FRM exam (two levels offered twice per year) is a counter punch to the competition of the PRM, and do you think this move will attract more candidates or just shift people’s attention more to the more flexible PRM exam?

4. On a personal level, I think I will be able to commit 8-10 hours/wk of solid preparation, if I start today, would you say it will be a good choice to shoot for the full exam in November or more realistic to settle for part I?

Thank you very much for taking the time answer my questions, I am looking forward to hear back from you.

Regards

Jeff

 

[David Harper CFA FRM]

Hi Jeff,

Thanks for the feedback and sharing your background.

1. Bridget has rightly pointed you to the Qualifying Titles. Assuming you have 24 months of experience, your experience will certainly (easily) qualify.

2. The FRM Handbook will be updated this year (5th Edition). The Handbook is not (will not be) written as a comprehensive reference on the exam. The assigned readings (in the Study Guide) are more important than the Handbook.

We often get the question, do I need to buy/read the assigned readings?
Can you please see the top of this post for my view: http://www.bionicturtle.com/learn/article/i_like_to_take_three_passes_through_new_material_frm/

In brief (and I've talked at some length to GARP about the best right answer), my view is:
a. I can't tell you because individuals vary
b. Since I don't know you, and since the exam is very difficult, I recommend (as a default position) everybody read the core/assigned, if for no other reason than it's the first,best "pass" among repeated exposures.
c. Your ability to forgo core/assigned readings is largely a function of how you arrive in aptitude. And, specifically, quantitative aptitude. A good test here is to scan the assigned Gujarati, Jorion, or K. Dowd. If you are in a "strange land" with these, I strongly suggest you plan to read the source; if, however, you are at ease (at home), you are rare and perhaps you don't need all of them. Finally, YES, our products cover everything. But you can tell that, nevertheless, to me that does not imply you can/should skip the assignments. I think you should consider the assignments regardless of your training provider.

3. I don't know about the future of FRM/PRM, I really wish I could tell. FRM didn't need to counterpunch b/c frankly the FRM has a larger audience (by my last estimate, order of magnitude, figure this year, maybe 20,000 versus 2,000+ registrants, ballpark). The PRM needs to counterpunch (my understanding is they have something in the works, aside from the Associate PRM), and frankly I hope they do because GARP needs some healthy competition. IMO, an updated PRM curriculum would be at least equal to, or could be better than, the FRM, so they deserve the opportunity to share the market. And I'm really fond of Carol Alexander (their Academic Chair) because she represents real leadership in risk...so, my summary judgment: GARP is way out in front on numbers/market penetration but PRM is underdog worth cheering for.

4. Based on what you do (I currently work in Structured Finance for one of the big four accounting firms) and therefore assuming you have, at a minimum, quantitative familiarity (i.e., you don't struggle with math notation too much), then your plan should *definitely* be sufficient to pass the Full exam. It's mostly a function of your time, so if you can start now, like that, you should be fine. Some people want to start, but don't until Summer/later Summer, then they should consider the two-step

I hope that helps, thanks for visiting - David H