Exam Feedback November 2022 Part 2 Exam Feedback

[Seb Serrano]

Passed. Thank you, BT team.

 

[ACosi0578]

Passed! Thank you so much BT team !!

 

[AMath1207]

Well I have failed !!! hoping to clear in next (May) attempt !!

 

[Kai]

I passed FRM Part 2! Thank you, David, Nicole, and the BT Team for your fantastic review materials.

I could not have done it on the first try without your support.

 

[Kai]

Please see below for some of my notes on the November 2022 FRM Part 2 CBT exam. I hope this helps many of those aspiring to be future certified FRMs focus their time and effort.

It’s easy to say this in hindsight now that I learned I passed, but I thought the exam was fair with the proper preparation using BT materials and GARP practice exams. I found the 4-hour timing to be reasonable and was able to finish with about 30 minutes to go and was able to check all my answers a few times.

Exactly 20 of 80 of my questions were calculation questions, some of what I remember are shared below:

25% Quantitative/Calculation (20 questions)

1. BCVA - given various credit measures EPE, NEE, DVA, and a table and had to figure out whether the exposure was positive or negative and what that meant for the bank's change (deterioration or improvement)
2. UCVA
3. Unexpected Loss
4. Stressed Credit Portfolio Calculation - calculate given two assets
5. Calculate the hurdle rate for RAROC
6. Risk Aversion, given IR, standard deviation, and omega
7. Incremental VaR - but wasn't so easy because given only standard deviation and correlation
8. Describe how Credit VaR can be calculated using a simulation of joint defaults. Joint Probability of Default of Two Credits, but needed to solve for value within the equation
9. Model 4 one step forward calculation given inputs
10. Jensen's Inequality Convexity Effect- given a two-step tree and needed to figure out what the Hedge Fund trades a repo, understand what the motivations and mechanics are for why it's made
11. Hedge Fund makes a repo trade with MF and needed to understand the right future value given a contracted invoice price, interest rate
12. 97.5% Expected Shortfall
13. 95% Lognormal VaR
14. Margin Account calculation. Given a table with a balance sheet of cash and one equity security and liabilities, was told to calculate the new total assets (equities and liabilities) after new equity was purchased and the next day the value of both securities dropped 25%
15. DV01 Regression Hedge
16. Credit VaR, given current notional value, future 1-year estimated notional value, and assumptions regarding LGD, PD
17. Calculate Economic Capital given some values for RAROC but not the actual percentage
18. Third-party Providers and recommendations on how to best handle
19. Interest Rate Sensitive Funds Gap Management. Given a table of a hypothetical company balance sheet and needed to understand between qualitative and qualitative answers which were the best to choose from
20. Credit VaR - understanding the way Basel 2.5 calculates

75% Qualitative (60 questions)

Didn't recall them all, but what I did remember included:

1. Interpret Regression- Given two regressions of excess return vs benchmark and peer group, what could be properly interpreted
2. What would CRO do to improve the misconduct, what would CRO do to?
3. Day to day Responsibilities of CRO
4. What would advise CEO who wanted to optimize the company in advance of a takeover accounting for SCAP and European Regulatory bank effects
5. BHC Effect of Capital Planning Rule
6. Cyber Regulation - 2 questions
7. Cyber Resilience
8. Cyber Incidents
9. Merton Model - qualitative, two questions
10. What would happen to equity, senior debt and subordinate debt if company had two probabilities of either getting taken over or going bankrupt
11. Right measures for EWI as company
12. Risk management unit
13. EVT - Frechet vs Gumbel
14. Volatility smile in context of FX Options
15. Effect of 2007-2009 Regulations on CCP and Clearing for simple and complex
16. Differences between no-arbitrage models vs other
17. VaR Backtest: When to use conditional versus unconfirmed adjustments in a model -given various situations
18. LCR versus NSFR, but different wording on understanding the right difference. Called LCR another name.
19. What to expect in a portfolio with national security where there is a loss in
20. Benefits of using VaR - Understanding difference between parametric vs historical Picking the right spread Definition (I-spread, z-spread, discount margin, asset swap spread) given a single definition
21. Right RAPM Performance Measure to use when a manager wants to game the system right at the time of measurement
22. Dollar-Weighted vs. money-Weighted Performance given the situation of security with dividends and additional purchases made
23. The best way for a company to improve net liquidity situation - given various changes to funding, which would improve it the most
24. How copulas function
25. FRTB Revisions to Basel Rules Detailed Calculation Specifics
26. Risk-neutral default and what it means in a model
27. Effect of the financial crisis on CDOs
28. Effect of COVID-19 flight to cash period
29. Wrong-way risk
30. Best way to improve ERM
31. RAF
32. Acute Physical Risks and how it affected a bank's credit risk
33. Company transitioning from AMA to SMA, what would recommend?
34. Stress Test Design Issues
35. Contingency Funding Plan Best Practices
36. US dollar shortage effects on financial system
37. Illiquidity across asset classes
38. Effect of illiquidity in a diversified portfolio
39. Optimal no-trade region for maximizing portfolio Sharpe ratio
40. Understanding ways to limit fraudulent behaviors occurring with correspondent bank
41. Money Laundering / Financial Crimes
42. Artificial Intelligence and its best usage
43. Regulatory and policy actions in response to e-money adoption risk
44. Explain elements of the due diligence process used to assess investment managers.
45. Identify EW guidelines from banking regulators and supervisors (OCC, BCBS, Federal Reserve). It was from the perspective of the Federal Reserve and you needed to recommend what they should do as a reasonable operational requirement for banks.
46. Use scenario analysis in managing operational risk and identify the biases and challenges that can arise when using scenario analysis
47. Describe credit value adjustment but in a situation where someone is training analysts about all the ways to calculate, and what would be the best way to properly account for CVA

 

[Jackk90]

Passed with 133411!! Thank you very much bionic turtle, especially for the preparation material, that I found absolutely in line with my exam and for the availability of the staff in the forum during the previous months.

Jack

 

[cml]

Awhile ago since last posted on BT. Passed with 222211.

I had the same thought as you guys for this exam diet - bit too qualitative and didn't require much calculation. Perhaps the passing rate is higher this time

 

[Library_books]

Passed with 3,2,1,1,3,1. Thanks to the BT team for their constant support.

 

[Nicole Seaman]

I also posted this in the Part 1 feedback thread, but I want to post here also.....

We appreciate all of your feedback on what everyone experienced on exam day! A big reason for this is that we do not ever see what is on the exams, so our customers' feedback helps us to improve our materials and support to reflect more of what will be tested on the actual exams. We only have this feedback and GARP's practice exams to refer to (and those practice exams have not always been reflective of the difficulty of the actual exams), so thank you so much to all of you for providing feedback and suggestions on how we can improve.

 

[JonathanJoke]

passed with 131332.

 

[nms99]

I passed FRM 2 with 1/1/2/1/4/2. The study material from BT was a huge help especially for part 2 due to the poor number of exercises in the curriculum from GARP. I invested a great number of hours in preparation for the exam. In addition, I also found the exam questions were more qualitative than quantitative which makes it harder for us guys who prefer to do the math.
Now I will take a long break from exams since I completed FRM within 1 year right after the CFA

 

[Jorge.Beca]

Passed. Thank you BT.

For all of you losing hope, never give up. Good luck.

 

[Francesco C.]

I finally managed to pass, the secret is to never give up.

Do you know how long it takes to get approval from GARP once work experience has been submitted?

 

[RNafr8813]

I'm in the same situation, I sent it the day the results were published and no news...

 

[Nicole Seaman]

I finally managed to pass, the secret is to never give up.

Do you know how long it takes to get approval from GARP once work experience has been submitted?

It can take up to 6 weeks for work experience to be approved. I have seen it take as little as a week, and I have seen it take as long as eight weeks. GARP does not provide us with information on their process of approving work experience, so unfortunately, we can't provide any information on that.

 

[relux2020]

It can take up to 6 weeks for work experience to be approved. I have seen it take as little as a week, and I have seen it take as long as eight weeks. GARP does not provide us with information on their process of approving work experience, so unfortunately, we can't provide any information on that.

Thanks Nicole and David! I received confirmation of my work experience on January 17th (submitted on January 4th). I passed with 3,2,1,1,1,1. Glad to be done. I could not have done it without Bionic Turtle!

 

[theKid]

Official designated today. Submitted Jan 5th. Thank you for all your support. 23 years old and FRM certified. Best of luck to all of you out there

 

[Library_books]

My work experience was approved yesterday. It took around 15 days for the approval process.