Financial Risk Manager (FRM) is one of the most coveted risk management credentials for finance professionals. FRM Part 1 is the first level of exam under the FRM certification program. Simplilearn brings to you online FRM Part 1 exam training that helps you prepare for the FRM exam at your own convenience. We are listed on GARP exam preparation providers as FRM Part 1 exam training provider. This presentation of FRM Part 1 helps you get a complete overview of concepts covered in the FRM exam. Each slide covers finance and risk management topics based on FRM Part 1 exam syllabus and is prepared by our experienced and certified trainers. Important topics such as Foundation of Risk Management, Quantitative Analysis, Financial Markets and Products, Valuation and Risk Models and so on. Get an understanding of each of these topics and improve your knowledge and confidence towards attaining the FRM Part 1 certification.

1. Financial Risk Manager (FRM®)
© 2012 – SimpliLearn| All Rights Reserved
Exam Structure – Part I
Financial Risk Manager (FRM®) is registered trade mark of Global Association of Risk Professionals 1

2. Agenda
Overview of FRM
Program structure
Exam structure
Part I and Part II
Part I Curriculum
SimpliLearn
Program
Structure
Benefits of FRM certification
FRM PART I Exam Structure 2

3. Overview
Financial Risk Manager (FRM®)
Registration
The Global Association of Risk • Online Registration
Professionals (GARP) certification - the
(Link : http://www.garp.org/frm/frm-program.aspx )
Financial Risk Manager (FRM®) is the
globally recognized standard for those • No pre-requisite for registration
who manage risk.
FRM Certification
2 years of work
experience (Risk-
Part II Exam related full-time
professional
• 4 hours experience)
Part I Exam • 80 MCQ
• 4 Hours
• 100 MCQ
FRM PART I Exam Structure 3

4. FRM Structure
FRM Foundations of Risk Management
(Twice a year.
FRM Part I Quantitative Analysis
Third Saturday
of May and
Nov.) Financial Markets and Products
Valuation and Risk Models
Market Risk Management
FRM Part II Credit Risk Management
Operational and Integrated Risk
Management
Risk Management and
Investment Risk Management
FRM PART I Exam Structure 4

5. About FRM Part I Exam
Part I of the FRM Exam covers the fundamental tools and techniques
used in risk management and the theories that underlie their use.
20% 20% 30% 30%
Foundations of Quantitative Financial Markets Valuation and
Risk Management Analysis and Products Risk Models
FRM PART I Exam Structure 5

6. FRM Part I Syllabus
Valuation and Financial Markets
Risk Models and Products
Foundations of Quantitative
Risk Analysis
Management
FRM PART I Exam Structure 6

7. FRM Part I Sub-Topics
An understanding Basic probability Equities Basic bond
of the trade-off and statistics Commodities valuation
between risk and Monte Carlo Valuation using
return Currencies
methods binomial trees
The construction Fixed income
Valuation and Risk Models
Management (20%)
Products (30%)
Foundations of Risk
Financial Markets and
(30%)
Quantitative Analysis (20%)
Volatility An understanding
of efficient forecasting Equity options and of the Black-
portfolios models other derivatives Scholes-Merton
Fundamental Value-at-Risk A basic model
asset pricing estimation understanding of Value-at-Risk
models arbitrage
arguments related The contingent
Enterprise risk claims approach
management to the valuation
frameworks Expected and
unexpected loss
A review of major estimation
financial disasters
Stress testing
Applications of the
GARP Code of
FRM PART I Exam Structure 7

8. More About FRM Part I Exam
Study Guide
SimpliLearn Study Notes
Duration 4 hours long
Original Readings Prescribed
by FRM
Scoring No negative marking
FRM Exam Preparation
Handbook
Calculator Only GARP-approved
2012 FRM Study guide calculators allowed
Result Pass/Fail. Quartile results are
provided.
2012 FRM AIM Statement
FRM PART I Exam Structure 8

9. Interpreting FRM Part I: AIM Statement
AIMS:
Jorion, Philippe. Value-at-Risk: The New Benchmark for Managing Financial Risk : 3rd Edition (New
York: McGraw-Hill, 2007).
Chapter l ................................. The Need for Risk Management
Candidates, after completing this reading, should be able to:
• Define risk and describe some of the major sources of risk.
• Differentiate between business and financial risks and give examples of each.
• Relate significant market events of the past several decades to the growth of the risk
management industry.
• Describe the functions and purposes of financial institutions as they relate to financial risk
management.
• Define what a derivative contract is and how it differs from a security.
• Define financial risk management.
• Define Value-at-Risk (VaR) and describe how it is used in risk management.
• Describe the advantages and disadvantages of VaR relative to other risk management tools
such as stop-loss limits, notional limits, and exposure limits.
• Compare and contrast valuation and risk management, using VaR as an example.
• Define and describe the four major types of financial risks: market, liquidity, credit, and
operational; and their forms.
Links to download the desired study materials:
http://www.garp.org/frm/study-center/study-materials.aspx
FRM PART I Exam Structure 9

10. About SimpliLearn FRM Part I Tutorial
Program Hours
More than ……hours of E-learning videos
6 sets of question papers in original format
Supporting Material
E-Learning
Complete course divided into more than 45 lessons
Supporting examples to understand the concept
More than 25 supporting Excel spreadsheets
Continuously Updated Updates
The program material is continuously updated to keep the Get frequent updates on exam guidelines, difficulty, exam
modules relevant, intuitive and asp per the latest curriculum and structure, pattern, relevant dates and news.
GARP guidelines.
FRM PART I Exam Structure 10

11. SimpliLearn FRM Part I List of Tutorials
Foundations of Risk Management Quantitative Analysis Financial Markets and Products Valuation and Risk Models
24. introduction - Options, Futures, and
1. The Need for Risk Management 13. Review of Probability Other Derivatives 37. Putting VaR to Work
38. Extending the VaR Approach to
2. Creating Value with Risk Management 14. Review of Statistics 25. Mechanics of Futures Markets Operational Risks
15. Linear Regression with One
3. Delineating Efficient Portfolios Regressor 26. Hedging Strategies Using Futures 39. Binomial Trees
16. Regression with a Single Regressor:
4. The Standard Capital Asset Pricing Hypothesis Tests and Confidence
Model Intervals 27. lnterest Rates 40. The Black-Scholes-Merton Model
5. Nonstandard Forms of Capital Asset 17. Linear Regression with Multiple 28. Determination of Forward and Futures
Pricing Models Regressors Prices 41. The Greek Letters
6. The Arbitrage Pricing Model APT-A New 18. Hypothesis Tests and Confidence 42. Bond Prices, Discount Factors, and
Approach to Explaining Asset Prices Intervals in Multiple Regression 29. Interest Rate Futures Arbitrage
7. Applying the CAPM to Performance
Measurement: Single-Index Performance 43. Bond Prices, Spot Rates, and Forward
8. Measurement Indicators 19. Discrete Probability Distributions 30. Swaps Rates
9. Overview of Enterprise Risk 20. Continuous Probability
Management Distributions 31. Properties of Stock Options 44. Yield to Maturity
45. One-Factor Measures of Price
10. Financial Disasters 21. Monte Carlo Methods 32. Trading Strategies Involving Options Sensitivity
11. Risk Management Failures: What are 22. Estimating Volatilities and
They and When Do They Happen Correlations 33. Commodity Forwards and Futures 46. The Rating Agencies
34. Fundamentals of Commodity Spot and
Futures Markets: Instruments, Exchanges
12. GARP Code of Conduct 23. Quantifying Volatility in VaR Models and Strategies 47. Country Risk Models
35. Foreign Exchange Risk 48. External and Internal Ratings
36. Corporate Bonds 49. Loan Portfolios and Expected Loss
50. Unexpected Loss
51. Measures of Financial Risk
52. 0perational Risk
53. Stress Testing
54. Principles for Sound Stress Testing -
Exam Structure Practices and Supervision
FRM PART I 11

12. Why Should One Go for FRM?
STAND OUT TO EMPLOYERS
DEVELOP YOUR KNOWLEDGE AND EXPERTISE
JOIN AN ELITE GROUP
DEMONSTRATE YOUR LEADERSHIP
CONFIRM YOUR ACHIEVEMENTS
ENHANCE YOUR REPUTATION
FRM PART I Exam Structure 12

13. Opportunities for FRM-Certified Professionals
Professionals Career Changer Students
Professionals who Enhance your career Students with an interest
manage risk, money, or opportunity and increase in finance may elect to sit
investments and want to scope of your job for the FRM Exam during
broaden their knowledge opportunities by arming or immediately after
of the different types of yourself with the highly completing their studies
financial risk enter the professional and as a complement to their
FRM Program in order to industry-wide recognized coursework.
enhance their current certification.
skill set.
FRM PART I Exam Structure 13

14. Insights from FRM 2011 Exam
FRM candidates came from 129 different
countries
There was a record 26,527 registrations for
the FRM Exam
Top 10 countries/regions with the most FRM
candidates: China, India, U.S., Hong Kong,
South Korea, Canada, United Kingdom,
Singapore, Taiwan, Switzerland
91% of candidates who sat for the November
2011 FRM Exam would recommend that their
colleagues also sit for the FRM Exam
FRM PART 1 Exam Structure 14

15. Who is Hiring?
The top 20 companies employing the most Certified FRMs are:
FRM PART I Exam Structure 15

16. THANK YOU
FRM PART I Exam Structure 16