Weightage – 20% (FRM Part 1)

• This module helps you to develop foundation of risk management through basics of statistics
• It covers basic topics like fundamentals of probability, random variable and some advance topics like Hypothesis testing and its application in risk management, Linear & Multiple Regression, Stationery and non-stationery time series analysis etc.
• Focus of this module is to develop in depth understanding of various types of distributions like Normal, Log normal, chi-squared, beta and their uses in risk management

Weightage – 20% (FRM Part 1)

• The first part of this section focuses informing candidates about banks/ Insurance companies & funds and second part focuses of derivative instruments.
• Derivatives part of this section cover topics like Exchanges and OTC markets, Central clearing, Pricing Forex, futures and option instruments, various options trading strategies, exotic options, Swaps etc.

Weightage – 30%  (FRM Part 1)

• Measures of financial risk – Value at risk (VaR) and its application into risk Management.
• Measuring and estimating volatility (GARCH model).
• Measuring credit risk: – Vasicek model, Creditmetrics, Gaussian copula model
• Fixed Income security: – Interest rates, Duration, convexity, parallel and non-parallel. structure shifts and hedging.
• Options pricing: – Binomial tree, Black-Scholes Merton, Option Greeks.

Weightage – 20% (FRM Part 2)

• Risk measures: Parametric non parametric estimation of Var, Extreme value theory (EVT), Back testing VaR, Estimated shortfall.
• Term structure models of Interest rates (Shape, drift, volatility & distribution).
• Correlation and its behaviour on real world.
• Volatility smiles & term structure.

Weightage – 20% (FRM Part 2)

• For banks and financial institutions, liquidity is one of the most essential resources. This module discusses the sources and uses of liquidity, ways using which banks can manage liquidity, Cash flow modelling, cross-currency funding etc.
• Other part of module focuses on banks’ Balance sheet management

Weightage – 20% (FRM Part 2)

• This module majorly discusses small-small aspects of operational risk and how and enterprises can develop resilience against those operational risk.
• The other part of this module discusses evolution of Basel norms over years.
• Barring few handful chapters, most on the chapters are text heavy.

Weightage – 15% (FRM Part 2)

• This module covers topics like Factor theory, Optimal Portfolio construction given investment constraints, portfolio risk management and measurement, risk monitoring and performance measurement, risk budgeting and hedge funds.
• Module is formula heavy and involves lots of calculations.

Weightage – 10% (FRM Part 2)

• This module focuses on current issues that have strong impact on financial markets like use of AI and ML uses in financial markets, threats of cyber-attacks on financial systems, transition from reference rate regime to overnight risk free rate, Covid-19 impact on markets, disasters due to climate changes and its impacts on financial institutions.

Weightage – 20% (FRM Part 2)

• This module focuses on developing understanding credit risks of banks.
• One part of this module focuses capital structure of banks, how credit ratings are assigned, portfolio credit risk, credits spreads and spread risks and credit risk management using Credit Var.
• Second part of this module focuses Counter party risk management, Credit value adjustment (CVA), stress testing of counter party risk, retail credit risk and credit scoring.
• Third part of this module focuses credit risk transfer mechanism like securitization and credit derivatives.