Financial Risk Management: 5 Tips for Passing the FRM Exam

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Finding new paths in your career can be an exciting time! Taking the leap and becoming a certified Financial Risk Manager, or FRM, is a big choice.

Taking this step requires passing the FRM exam, which is a certification provided by the Global Association of Risk Professionals, or GARP.

Taking the FRM exam is a big endeavor and as such, you should take all the precautions and prepare for it. We’ll help you through the big issues down below.

The Proper Preparation for the FRM Exam

There are two parts to the FRM exam. The tests are multiple-choice format and taken in either May or November.

The exam does have a sizeable entry fee, so do not enter until you are sure you are ready. How do you prepare for the test itself? There are many different ways.

1. Familiarize Yourself With the Exam Topics

While you can’t know the exact questions on the exam, you can be familiar with the topics it covers. These are important topics that are key to the career of a Financial Risk Manager.

The first exam is 100 questions and covers foundations of risk management, quantitative analysis, financial markets and products, and valuation and risk models.

The second exam is only 80 questions but covers even more topics. The topics are market risk, credit risk, operational risk, liquidity and treasury risk, risk and investment management, and current issues in financial markets.

2. Start Your Studying Early

Studying for an exam this massive and important should take several hundred hours for each part. Thoroughness is going to be a major part of this exam.

As such, it is always best to start early. The more time you have to put into this, the better your chances are.

3. Keep Your Study Structured and Focused

Discipline is a key ingredient to a lot of studying and similar work. If you do well in a self-taught school environment, you may be fine here. For most, you will need to craft a schedule to keep your focus strong.

How you do this depends on what works for you. You can try many things, from simple schedules to getting FRM coaching. No matter your method, make sure you stick to it.

4. Take Practice Versions of the Exam

You can find practice exam copies of the FRM exam. These will not have the same questions and answers on them but will have the same structure and complexity.

This will allow you to get a solid glimpse into what to expect on exam day itself. Treat these with importance and make sure you take time off to do them in one go.

You won’t have multiple days to complete the real thing, so don’t try it with the practice.

5. Finding Relaxation on Exam Day

With all the preparation in place, there is one thing to remember. You must remain calm throughout the exam process. Panic only unfocuses the mind and ruins the preparation you built.

The best way to gain the calm focus you need is with a game plan. Make sure you know the site where the exam takes place. Arrive early and with all the materials you need.

Go over your exam practice but don’t drill yourself too hard right before the exam. Have confidence in your own skills.

Better Understanding for a Better Future

With the right preparation, the FRM exam will be a thing of the past. With your certifications in check, you will be able to find better career options and delve further into the world of risk management.

There is so much more to life and technology than exams and career choices. Whether you keep up-to-date for business or pleasure, we here at Infinity On Loop will keep you in the loop! Check out our other articles today!