July 15, 2009
There has been debate about the kind of questions asked in FRM Exam. If you meet 100 people who have appeared in the examination, 50 would say that the mix is more skewed towards theoretical questions and 50 would say that it is more towards numerical problems. Getting the right strategy for FRM exam preparation tends to be difficult because of this confusion.
We thought that it would be best to analyze the past year’s papers (Based on the sample exam that GARP sends) and see, what actually is the reality?
If we take a look at the complete FRM exam question set, we find that 55% of the questions are numerical and 45% are theoretical.
The only exception has been the Operational and Integrated Risk Management Part having 75% theoretical questions and market risk having 70% theoretical and descriptive questions.
Approximately 20% of the numerical questions are of high toughness, requiring substantial understanding of concepts and heavy calculations. And approximately 10% of numerical questions are easy and simple formula based questions. The difficulty level is evenly distributed in most of the topics of the FRM exam.
So in order to score well in these subjects one needs to at least focus on the numerical part of VaR, Quantitative Analysis and Credit Risk. We would be regularly updating this article with more details on the pattern of the FRM exam.