FRM Syllabus 2025: Complete Part I & II Curriculum & Study Plan

Get the complete FRM syllabus for both Part I and Part II as per GARP’s latest curriculum. Covers all key topics including risk management, quantitative analysis, financial markets, valuation, credit risk, market risk, operational risk, liquidity risk, and current financial issues like ESG, Fintech, and regulatory updates.

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The FRM (Financial Risk Manager) certification by GARP (Global Association of Risk Professionals) is one of the most prestigious global qualifications for finance professionals focusing on risk analysis, market and credit risk, operational risk, and asset management. This article provides the complete FRM syllabus 2025, covering both Part I and Part II exams in detail — including subject-wise topics, topic descriptions, marks distribution, downloadable syllabus PDFs, recommended books, preparation strategies, and career specializations.

The FRM certification demonstrates your ability to understand and manage risks in global financial markets. The course is divided into two levels — Part I focuses on fundamental tools and techniques, while Part II emphasizes application in real-world risk scenarios.

FRM Exam Overview

Exam Component	FRM Part I	FRM Part II
Focus	Risk assessment tools & fundamentals	Application of risk management
No. of Subjects	4	6
Question Type	100 Multiple Choice	80 Multiple Choice
Duration	4 Hours	4 Hours
Mode	Computer-Based	Computer-Based
Attempts Per Year	May, August, November	May, August, November

FRM Part I Syllabus

1. Foundations of Risk Management (20%)

Topic	Details
Risk Types	Credit, market, operational, and liquidity risks
Risk Appetite & Tolerance	How firms determine acceptable risk levels
Corporate Governance	Board oversight, ethics, risk policies
Enterprise Risk Management (ERM)	COSO framework and components
Basel Accords	Overview of Basel I, II, and III guidelines
Risk-Adjusted Return	RAROC, economic capital, performance metrics

2. Quantitative Analysis (20%)

Topic	Details
Probability Theory	Normal, lognormal, binomial distributions
Descriptive Statistics	Mean, median, variance, skewness, kurtosis
Regression Analysis	Simple & multiple regression, confidence intervals
Time Series Analysis	AR, MA, ARIMA models
Hypothesis Testing	Null vs. alternative, p-values, Type I/II errors
Estimation Techniques	Maximum Likelihood Estimation (MLE), OLS

3. Financial Markets and Products (30%)

Topic	Details
Fixed Income	Bonds, yield curve, duration, convexity, credit spread
Equities	Valuation methods, short selling
Derivatives	Futures, options, swaps, forwards
Structured Products	MBS, ABS, CDOs, tranching
Trading & Hedging	Delta hedging, basis risk, settlement systems

4. Valuation and Risk Models (30%)

Topic	Details
Time Value of Money	Present value, future value, annuities
Bond & Equity Valuation	DCF, dividend discount models
Option Pricing	Black-Scholes, binomial trees, Greeks
Value at Risk (VaR)	Parametric, historical, Monte Carlo methods
Portfolio Risk	Correlation, covariance, beta, diversification
Stress Testing	Scenario and sensitivity analysis

FRM Part II Syllabus

1. Market Risk Measurement and Management (20%)

Topic	Details
VaR Techniques	Delta-normal, simulation, component VaR
Backtesting	Model validation, loss exceedance
Stress Testing	Historical events, reverse stress tests
Risk Attribution	Risk contribution to portfolio
Extreme Value Theory (EVT)	Tail risk, black swan events

2. Credit Risk Measurement and Management (20%)

Topic	Details
Credit Exposure	EE, EPE, PFE
Credit Rating Models	Migration matrices, internal rating systems
Credit VaR	Exposure modeling, loss distribution approach
Credit Derivatives	CDS, CLN, synthetic CDOs
Loan Portfolio Management	Concentration risk, mitigation strategies

3. Operational and Integrated Risk Management (20%)

Topic	Details
Basel III Operational Risk	SMA, AMA, standardized approach
Risk Culture	Governance, whistleblowing, accountability
Cybersecurity Risk	IT vulnerabilities, fraud prevention
Integrated Risk Management	ERM, interdependency modeling
Risk Indicators	KRIs, scenario analysis

4. Liquidity and Treasury Risk (15%)

Topic	Details
Liquidity Risk Drivers	Market vs. funding liquidity
Metrics	LCR, NSFR, cash flow mismatches
ALM Techniques	Duration gap, repricing schedules
Funds Transfer Pricing	Cost of capital, internal pricing methods
Contingency Funding	Stress testing, fire-sale scenarios

5. Risk and Investment Management (15%)

Topic	Details
Portfolio Theory	Mean-variance optimization, efficient frontier
CAPM and Multifactor Models	Fama-French, arbitrage pricing theory
Performance Attribution	Return decomposition, risk-adjusted return
Hedge Funds	L/S equity, event-driven, quant strategies
Asset Allocation	Strategic vs. tactical decisions

6. Current Issues in Financial Markets (10%)

Topic	Details
Climate Risk	ESG investing, carbon accounting
Fintech Risks	Blockchain, DeFi, digital asset volatility
Global Regulations	Basel IV, FRTB, IFRS 9
Cybersecurity & AI Risk	Algorithmic trading, systemic cyber threats

FRM Syllabus PDF Download

You can download the latest official syllabus PDFs directly from the GARP website:

Download FRM Syllabus PDF (Part I & II)

Recommended Books for FRM 2025

Part	Books
FRM Part I	GARP Official FRM Books (Wiley) Schweser Notes for FRM Part I Financial Risk Manager Handbook – Philippe Jorion
FRM Part II	GARP Official FRM Books (Wiley) Schweser Notes for Part II Handbook of Risk Management – Jorion

FRM Preparation Strategy

Study Hours: Dedicate 300–400 hours per part.
Use Official Materials: Start with GARP books before third-party guides.
Practice MCQs Daily: Minimum 30 questions/day.
Join Online Groups: Reddit FRM, AnalystForum, LinkedIn communities.
Mock Tests: 4–5 full-length mocks before exam.
Spaced Revision: Plan 4–6 weeks for review after first full reading.

FRM Specialization & Career Roles

Specialization	Career Role
Market Risk	VaR Analyst, Market Risk Manager
Credit Risk	Credit Analyst, Portfolio Risk Analyst
Operational Risk	Compliance Manager, Internal Auditor
Liquidity & Treasury	ALM Specialist, Treasury Risk Analyst
Investment Risk	Fund Risk Manager, Hedge Fund Analyst
ESG & Fintech Risk	Climate Risk Analyst, Fintech Risk Advisor

Conclusion

The FRM syllabus 2025 is comprehensive and globally relevant, making it ideal for professionals in banking, asset management, consulting, and regulatory domains. By understanding every concept in Part I and applying it practically in Part II, you can position yourself as a sought-after financial risk expert. With the right strategy, preparation, and study materials, the FRM certification can become your gateway to top-tier roles in finance.

Gaurav 8 hours ago