This is an interview in a series of Interviews that EduPristine would conduct. EduPristine would meet professionals/ students / other people, who have been successful in clearing FRM and get their views on how to succeed. EduPristine is hopeful that it would give the readers some insight into how to crack FRM and other certifications in finance.
Paramdeep Singh, a director with EduPristine speaks to Prashant Joshi, an expert in Banking and Risk Management. Prashant has been working in the field of Risk Management for the past 4 years. He has significant experience in Banking and Credit Risk. Prashant secured ALL Q1s in the FRM Exam.
Param: Tell me a brief about your background
Prashant: I am an MBA from IIM-Indore and am working in area of Corporate Banking Credit for the past 3 and a half years.
Param: Why did you give the FRM exam?
Prashant: My area of interest is risk management and FRM looked to be the only relevant course around which would involve studying the subjects that interest me.
Param: Do you think that background plays an important role in clearing FRM?
Prashant: Yes, it does. Familiarity with basic concepts in the area of derivatives and maths are of big help.
Param: What has been your Mantra for success?
Prashant: Mantra has been not to worry about the exam and just go through the maximum possible readings that GARP recommends. Covering all the readings is a difficult task and prior reading during MBA or otherwise were of big help.
Param: When did you start preparing?
Prashant: No particular preparation was done for the exam. Most of the time was spent on Market Risk and Credit Risk which actually are the interesting topics in the whole of FRM. Even here, I actually stuck to topics of my interest though that resulted in my not attempting some of the questions at all. I did try to read consistently as I have a tendency to forget what I study, but again, the focus was not on the exam but on general reading.
Param: how much did you study?
Prashant: I have been keeping touch with a lot of material even prior to applying for FRM. So I cant say as to how much I actually studied.
Param: What subjects did you concentrate on?
Prashant: I concentrated on Credit Risk and Market Risk. Quant I mostly knew and had to just refresh it once as it is not covered in great detail for the exam. For other 2 topics, I just had a look at the readings once though I could not comprehend much. Also used Jorion’s Handbook for these topics.
Param: What do you think is the best way to crack the subjects?
- Credit Risk: Ong is good and basic. Some of the readings were also quite good, especially the ones on Merton’s model of debt as option & issues in securitization. For the exam what I lost out on was various credit risk models which the exam harps on but I didn’t. One should also have an understanding of Credit Derivatives and its various forms available.
- Market Risk: John Hull covers everything. For Fixed income I read Bodie Kane & Marcus which is good for concepts and then Hull and a couple of chapters from Rebonato. Tuckman, I didn’t like. Value at Risk too I ignored but that does cost you as they ask a lot of questions on VaR and its measurement.
- Operational Risk: I just flipped through the readings and Jorion’s handbook. Basic idea of Basel norms is also essential.
- Quantitative Analysis: Gujarati for regression. One should also have understanding of various distributions and their characteristics. Various readings in the material given cover them.
Param: How best can EduPristine be used for preparing for FRM?
Prashant: Classroom training can drastically reduce preparation time, especially for those who are new to the area. Also, summary notes and Mock FRM exams maybe used prior to the exam to revise the concepts and keeping a tab on one’s performance.
Param: What are your career plans after achieving the FRM certification?
Prashant: Nothing in particular. Continue with the current job.
Param: Lastly, what did you do on the final day before the exam?
Prashant: Just flipped through the readings and maybe some of the formulae.
Param: Your Advice to FRM/ Finance aspirants:
Prashant: I don’t think that clearing the FRM has got much to do with an understanding of Risk. However, one could use FRM as something which could guide a person in this wide and ever evolving and still not fully understood area. So if one sticks to the basics and not worry too much about the exam, then if I can clear it so can anyone.
These FRM Interviews are presented by EduPristine (Leader in FRM/ CFA®/ PRM/ FinanceTraining).
Click Here to know more about FRM Training