FRM Level 1 – How to Prepare for the Exam
Understand the curriculum
To understand concepts, use Schweser notes. They are really good and will help you in getting through the exam. If you have enough time you can use the GARP textbooks as it is vast and requires a lot of time to complete. Other options such as Wiley and Bionic Turtle are also available.
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The pattern of Exam:
- Part 1 – 70% theory questions, 30% Quants
Steps that you can take for clearing the FRM Level 1 exam in First Attempt:
Study Material to be used:
- Stick to only one material or Books for Preparation like either Schweser or BT or Wiley
- Go through Schweser Books or any other material twice before the exam[ Schweser Notes is enough]
- FRM Handbook by Philip Jorione is one such material which has good questions related to FRM Difficulty level and also past exam questions.
Preparation Methodology:
- The first Focus should be on the Calculator and Solve Time Value Money related Questions.
- There is a lot of theory chapters in FRM Exam like GARP Code of Conduct, Principals of Risk Data Aggregation, Insurance & Pension Funds, Banks, Fund Management, etc. Try to complete the theory first along with Question Bank Solving.
- Next, you can focus on Chapters related to calculation and Quants.
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Focus on the Related Topics in one go – Follow the below order
-
- Topics related to Futures & Forwards – Books 3
- Topics related to Options – Book 3
- Topics related to Option Valuation – Book 4
- Topics related to Probability and Random Variables – Book 2
- Topics related to Hypothesis & Linear Regress – Book 2
- Topics related to Times Series Analysis and Simulation – Book 2
- Topics related to Portfolio Management like CAPM – Book 1
- Topics related to Value At Risk – Book 4
- Topics related to Bond Valuation- Book 4 & Book 3
- Topics related to Mortgage-Backed Securities and Credit Transfer Market & Crisis – Book 3 & Book 1
Practicing Question Papers for FRM Level 1:
- You should Solve at least 2500+ questions which should range from difficult to easy for each chapter of each book.
- You should target to keep solving questions within 2 mins as there will be time crunch in the Exam. 100 Questions in 4 hours will not be easy as there will be lengthy questions
- While Solving Questions – Mark different questions which you found difficult, questions which you took time to solve, Question you didn’t understand. These marking will help you priorities your preparation during revision
- Ideally, any candidate should Solve at least 4 mock papers including GARP Sample paper before the exam. Try to solve the mocks during the same as the Exam like 8am to 12pm without a break.
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Time Commitment:
- Ideally, you should put 250 – 350 hours for the exam preparation depending upon your previous educational background. Like if you are a CA then you might focus more on the Quantitative Methods book or If you are an Engineer then you might focus more on Financial Market and Product Book.
- It is advisable to take 2 weeks off before the exam to help in better preparation for the exam.
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