FRM Preparation

By Shreya Gupta ('22 Grad, Manufacturing Pilani). She is enthusiastic about the field of finance and has a minor in the same. In her quest to explore more, she has pursued finance, operations, strategy and supply chain-based internships, served in the Placement Unit of BITS Pilani, and is now a Manufacturing Manager at HUL.

She qualified FRM Level 1 exam in her third year.

What is FRM?

Financial Risk Manager (FRM) is a professional designation issued by the Global Association of Risk Professionals (GARP). It is a well-renowned certification for professionals who want to pursue a career in Risk Management.

FRM vs CFA? Which one should I pursue?

This is a very common question that people often ask. There is no right answer to this, it depends on your strengths.

Subject wise:

If you have a strong base in Quants (especially statistics) you might find FRM to be more suitable for your choices. If you enjoy economics concepts or even subjects like Principles of Economics (POE) CFA will provide you with a much-diversified knowledge. 

Points to remember: 

• FRM is focused on Risk management concepts only and it is heavy on quants.

• CFA gives a generic overview of the concepts of Finance.

Careerwise:

• If you are interested in a role in Risk Management, then pursue FRM.

• If you are interested in Corporate Finance/Investment Banking but not sure which role you would like to pursue, CFA would be a better alternative.

Preparation Material: 

I used Schweser Notes as my primary preparation material. Apart from this, there are plenty of YouTube videos that can give you a fair idea of the concepts you are not being able to understand by reading. In the last 2 months, I used the papers by Finlearning for mock examinations. 

Bonus Tips

These are the tips that’ll help you qualify the exam:

1. Prepare short notes of your understanding in a separate book. This is the book you will review a week before the final attempt. (Very important)

2. Make sure you are accustomed to the exam format. It is a 4hr exam (8 am -12 pm), your body should be alert enough during these 4hrs to solve problems. Practice sitting in 4hr sessions 2 weeks prior to the exam date

3. Learn how to use the financial calculator well. Solve all the mock exams using only the financial calculator. 

4. Make sure to look at the mistakes you have committed in the mocks and analyse them to understand your weak areas. Remember that like any other exam you only have to be able to solve the problem at the end of the day

5. Make sure to take the official GARP FRM paper, the difficulty level suits exactly the actual exam. Scoring a 75+/100 will ensure a safe pass. However don’t get demoralized if you end up scoring bad, it’s all about the final day.

6. If the paper is long, don’t panic, it’ll be the same for everyone. Be calm and confidently attempt the ones you are sure of.

7. Make an exam strategy before the final day. My quants was a strong point so I attempted all the quant questions first, this boosted my confidence during the exam as well.

8. Stick to the strategy you have been following, never change it at the last moment.

Finally, since the exam costs above INR 60,000, all of us have more or less a single attempt so make sure you have the ability to give the required time to the course work. (There are better resources to speed up your preparation which I learnt about after wasting a lot of time, so in case anyone needs help with that, hit me up on LinkedIn). 

Lastly, it is an exam that tests your resilience and ability to quickly solve problems. Time required for part 1: 6 months (if you have no knowledge of Finance); 3-4 months (with knowledge of finance like DRM and FRAM).