Overwhelmed by the number of concepts & theories in course

[Kr1]

I plan to attempt FRM level 1 in May.

I just looked at some BT and Scweser notes from a friend and I must say, I was overwhelmed by the sheer number of concepts, theories and formulas in this curriculum.

I really dont beleive that its possible to prepare for this exam in the 300-400 hours normally suggested. This exam IMO would require a year and seems impossible without attending regular classes.

Just to let you know, I have a reasonably strong math background and have just cleared ACCA adv fin mgmt exam by self study. Im not making any comparison just saying Im not totally clueless about this field.


So how is it possible really, to study, understand several dozen theories, concepts and mathematical formulas in such a short period, and learn to apply them? Unless its only required to learn a few important ones. Or unless its only required to understand the 'surface' w/o going in depth.

 

[Aleksander Hansen]

If you follow the Bionic Turtle notes, there is a logical progression, in which new material builds on prior concepts. So what seems like a lot of formulas can in reality be distilled down to a much smaller sub-set of important concepts - from which other formulas and theories can be explained and understood. It might seem overwhelming at first but in reality it is not. That is not to say that it does not take any effort to learn the material, it does. However, you can expect, on average, to spend 300-400 hours on it. The more you learn, the better you understand prior concepts and they become second nature to you.

 

[Aleksander Hansen]

By the way, doing the Bionic Turtle Practice Questions is key to passing the exam. There you get to really explore and understand the concepts. Oh, and Kaplan cannot match Bionic Turtle... to many errors in the notes, too easy questions.

 

[David Harper CFA FRM]

Yes, interesting, I will be very interested in Aleksander Hansen 's view (apparently I was posting at the same time as Aleks!), but my perspective (as somebody who has "taught" the FRM for several years and interacted with the community from multiple angles) is that, in a literal sense, it is my opinion that you are most certainly correct. That is, if you take the published AIMs, and the criteria is "comprehend all of these AIMs, as they are literally published," then I don't see how it can be possible due to both breadth and depth. Some of the AIMs are quite deep, requiring not a trivial degree of mastery, and some of the calculations are quite involved.

So this fact has been viewed both positively and negatively (as a criticism).

I personally wish GARP would not "over-reach" to the degree they do; for example, the credit risk 2013 adds at least some counterparty (CVA) AIMs that have no hope of being tested; meanwhile, certain of last year's dense CVA readings made essentially one-year appearance, so the flux on CVA is outpacing the actual exam. There are many other similar examples; Hull has a T-bond futures pricing exercise that perennially hangs up some candidates, yet to my knowledge has never been tested (eg).

From an exam perspective, then, I think the "solution" is sort of a layer-cake: first, comprehend the foundational concept that constitute the majority of the testable FRM, then second, drill down in certain areas only as time permit. Thanks,

 

[David Harper CFA FRM]

Aleksander Hansen i think our procedures are essentially similar ("build"), only qualifier i would add is something that often comes up, no surprise: the background of the candidate. Sometimes I don't think folks who have a quant or finance, or quant + finance background, quite appreciate the humongous challenge the FRM can be. If, for example, a candidate doesn't have any calculus (think about how long it can learn just to interpret a first derivative) or isn't facile (compound frequencies), then getting from those starting points to some of the AIM concepts even in P1.T3/T4 can be a long journey, thanks,

 

[vs65]

Hey David,
These are the issues that I am strugging with. For example the Quant practice question solution used log and exponential functions and I could not understand Suzzannes solution to problem 3 (P2.T1.300) .Can you suggest additional material/books/concepts I might need to study to grasp the concept so that I am able to handle similar and more complicated material down the line?
Thanks,

VS

 

[NewComer]

I plan to attempt FRM level 1 in May.

I just looked at some BT and Scweser notes from a friend and I must say, I was overwhelmed by the sheer number of concepts, theories and formulas in this curriculum.

I really dont beleive that its possible to prepare for this exam in the 300-400 hours normally suggested. This exam IMO would require a year and seems impossible without attending regular classes.

Just to let you know, I have a reasonably strong math background and have just cleared ACCA adv fin mgmt exam by self study. Im not making any comparison just saying Im not totally clueless about this field.


So how is it possible really, to study, understand several dozen theories, concepts and mathematical formulas in such a short period, and learn to apply them? Unless its only required to learn a few important ones. Or unless its only required to understand the 'surface' w/o going in depth.

Come down, this is usual reaction of quants on this stuff.
I felt the same when in 90s switched from Phys/Math to economics.
Believe me, it is much easier than, say, to solve the set of partial differential nonlinear equations (nonstationary)…

PhD, CFA, MBA, FRM

 

[RiskNoob]

... meanwhile, certain of last year's dense CVA readings made essentially one-year appearance, so the flux on CVA is outpacing the actual exam.

I agree with the above feedback, it is painful and costly to both FRM prep-study provider and (any returning) candidates. I have seen that for Prob & Stat intro in T2 this year as well. GARP should have set some settlement periods (e.g. more than 1 yr) for some major topics chapters.

RiskNoob

 

[David Harper CFA FRM]

RiskNoob, I could not agree with you more, it is so costly. T2 is a great example: in recent years, without substantial AIM changes in econometrics, the FRM rotated from Gujarati to Stock & Watson to Miller (retaining S&W for regression). All the while, in my opinion, the Gujarati is still the most comprehensive (best) resource on these AIMs: Gujarati early chapters can apply today. The motivation apparently for S&W was better accessibility/usability (which proved to be wrong) and I *think* the motivation for Miller is that it's reviewed in the context of finance-domain (but it's briefer, and i would not say more accessible, so there is a trade-off).

Your settlement period idea makes great sense, thanks,

 

[Aleksander Hansen]

GARP should have set some settlement periods (e.g. more than 1 yr) for some major topics chapters.

I could not agree more. They might want to actually look through the readings as well and see how the overall flow and coherence of the material works in practice.

They make it unnecessarily difficult for students as every time material is changed, companies like Bionic Turtle has to rush to update their material. The more GARP drags its feet on settling on a reading, and communicating it, the less time students will have to prepare. Often Bionic Turtle unfairly get flack for not updating the readings, however, it's not an easy task to update loads of material, and have it be of good quality in a very short period of time. Rather, the blame lies with GARP which seem to behave like a random walk - impossible to predict...

 

[Backwardation]

I plan to attempt FRM level 1 in May.

I just looked at some BT and Scweser notes from a friend and I must say, I was overwhelmed by the sheer number of concepts, theories and formulas in this curriculum.

I really dont beleive that its possible to prepare for this exam in the 300-400 hours normally suggested. This exam IMO would require a year and seems impossible without attending regular classes.

Just to let you know, I have a reasonably strong math background and have just cleared ACCA adv fin mgmt exam by self study. Im not making any comparison just saying Im not totally clueless about this field.


So how is it possible really, to study, understand several dozen theories, concepts and mathematical formulas in such a short period, and learn to apply them? Unless its only required to learn a few important ones. Or unless its only required to understand the 'surface' w/o going in depth.

Hi,

I would even go one step further and say that maths won't bring you any advance for this exam, except for the basic statistical understanding (hypothesis testing, distributions etc.). This is basically due to the fact that you have to learn the formulas by hard and are not allowed to use any formula manuals or software, which is standard for advanced maths exams.

I would also estimate 1 year of focused learning to be able to make the exam.

Kind Regards

 

[Aleksander Hansen]

Hi,

I would even go one step further and say that maths won't bring you any advance for this exam, except for the basic statistical understanding (hypothesis testing, distributions etc.). This is basically due to the fact that you have to learn the formulas by hard and are not allowed to use any formula manuals or software, which is standard for advanced maths exams.

I would also estimate 1 year of focused learning to be able to make the exam.

Kind Regards

This really does depend on your background. I strongly believe that your background in math has something to do with it. For example, without knowledge of calculus you'll be in a world of hurt when you get to the BSM partial differential equation and the option greeks. 1 year seems to be a bit much, but of course it may be the case for some. I would point out that the chart David provided regarding how much candidates study on average paint a different picture. Personally I was on the left side of the distribution and it's not that I'm smarter than anyone else, it's just that I had a strong math, stats and finance background, which allowed me to spend less time on reviewing material, and doing the practice questions didn't take me that long. So I would dare say that the time spent studying is a function of your prior knowledge.

 

[vs65]

I am noticing a good use of calculus in practice questions. Can anyone suggest a good resource to gain understanding of calculus?

 

[Aleksander Hansen]

I would check out this free online course from University of Pennsylvania at Coursera: https://www.coursera.org/course/calcsing

 

[ShaktiRathore]

hi
refer to the lnks:
http://www.understandingcalculus.com/chapters/04/4-1.php
http://ocw.mit.edu/resources/res-18-001-calculus-online-textbook-spring-2005/textbook/

thanks

 

[vs65]

Thanks Aleksander and Shakti. The links are very helpful. Should give me a good headstart.

VS