Financial Risk Manager- FRM Exam Prep (Part 1)

Overview

Recognized in every major market, the FRM is the leading certification for risk managers. It is consistently in demand by nearly every major bank and firm in the world, and is awarded only to professionals who demonstrate the knowledge and ability to anticipate, respond, and adapt to critical risk issues.

There’s never been a more crucial time to stand out. As the financial industry becomes increasingly competitive, the professionals who succeed are the ones who can demonstrate their ability to add value to an organization. Earning your FRM proves that your knowledge and skills are up to the latest international standards, and connects you to an elite network of expert risk professionals employed by the world’s leading institutions.

As the field’s leading designation, the FRM is the key indication of candidates with proven ability and experience. Anyone can register to take the exam. FRM certification is awarded after a candidate has passed two rigorous multiple choice exams (FRM Exam Part I and Part II) and demonstrated two years of relevant work experience. Candidates must take the FRM Exam Part I before taking Part II. Certified FRMs are strongly encouraged to earn 40 hours of Continuing Professional Development (CPD) every two years to maintain the latest best practices in risk management.

In order to be a certified FRM you need to understand credit and market risks and successfully pass the FRM exams (Part 1 and Part 2). This Exam Prep course will help students to prepare for Part 1 of the FRM exam. This prep course covers the Foundations of Risk Management, the tools used to assess financial risk, quantitative analysis, financial markets and products, and valuation and risk models. The exam consists of 100 equally weighted questions and students have four hours to complete the exam. Both parts of the FRM Exam are offered twice a year, in May and November.

Learning Objectives

Upon completing this course, students will be able to:

• Prepare to complete the FRM exam Part 1
• Improve knowledge of Financial Management and Risk Management
• Increase their knowledge of valuation and risk models
• Explain the foundations of risk management
• Perform quantitative analysis
• Have increased knowledge of Financial markets and risk strategies

Topics Covered

Foundations of Risk Management

• Basic risk types, measurement and management tools
• Creating value with risk management
• Risk governance and corporate governance
• Credit risk transfer mechanisms
• The Capital Asset Pricing Model (CAPM)
• Risk-adjusted performance measurement
• Multifactor models
• Data aggregation and risk reporting
• Financial disasters and risk management failures
• Ethics and the GARP Code of Conduct

Quantitative Analysis

• Discrete and continuous probability distributions
• Estimating the parameters of distributions
• Population and sample statistics
• Bayesian analysis
• Statistical inference and hypothesis testing
• Measures of correlation
• Linear regression with single and multiple regressors
• Time series analysis and forecasting
• Simulation methods

Financial Markets and Products

• Structures and functions of financial institutions
• Structure and mechanics of OTC and exchange markets
• Structure, mechanics, and valuation of forwards, futures, swaps and options
• Hedging with derivatives
• Interest rates and measures of interest rate sensitivity
• Foreign exchange risk
• Corporate bonds
• Mortgage-backed securities

Valuation and Risk Models

• Value-at-Risk (VaR)
• Expected shortfall (ES)
• Estimating volatility and correlation
• Economic and regulatory capital
• Stress testing and scenario analysis
• Option valuation
• Fixed income valuation
• Hedging
• Country and sovereign risk models and management
• External and internal credit ratings
• Expected and unexpected losses
• Operational risk