FRM

Product Description

📗 Part I – Foundations of Risk Management

Focus: Core tools and concepts in finance and quantitative analysis.

1️⃣ Foundations of Risk Management

• Risk types and risk management process

• The role of risk management in corporations

• Governance and the risk management function

• Risk appetite, culture, and frameworks (COSO, ISO 31000)

• Lessons from financial disasters

2️⃣ Quantitative Analysis

• Probability and statistics

• Random variables, distributions, and moments

• Hypothesis testing and confidence intervals

• Linear regression and time series analysis

• Monte Carlo simulation

3️⃣ Financial Markets and Products

• Types of financial products: bonds, stocks, derivatives

• Futures, forwards, swaps, and options

• Interest rate and currency markets

• Hedging and trading strategies

4️⃣ Valuation and Risk Models

• Time value of money and discounting

• Measuring risk: volatility, VaR, Expected Shortfall

• Option valuation models (Black-Scholes, binomial trees)

• Duration, convexity, and yield curve analysis

📘 Part II – Risk Management and Investment Management

Focus: Application of risk management tools in practice.

1️⃣ Market Risk Measurement and Management

• Value at Risk (VaR) and stress testing

• Backtesting and model risk

• Risk-adjusted performance measurement

2️⃣ Credit Risk Measurement and Management

• Credit risk models (CreditMetrics, CreditRisk+)

• Default probability estimation

• Credit derivatives (CDS, CDOs)

• Counterparty credit risk and CVA

3️⃣ Operational Risk and Resiliency

• Risk identification and control frameworks

• Loss event data, key risk indicators (KRIs)

• Business continuity planning (BCP) and resilience

• Cyber and third-party risk

4️⃣ Liquidity and Treasury Risk Measurement

• Funding liquidity vs. market liquidity

• Liquidity stress testing

• Asset-liability management

5️⃣ Risk Management and Investment Management

• Portfolio construction and performance attribution

• Hedge fund and private equity risks

• Behavioral finance

• Risk budgeting and capital allocation

6️⃣ Current Issues in Financial Markets

• New regulations (Basel III/IV, FRTB)

• ESG risk, climate risk

• Fintech, AI in risk management

📅 Exam Format