FRM Part II Exam: Complete Preparation Guide

How to prepare FRM Exam Part II

1. Confirm your window and eligibility. Part II must be passed by December 31 of the fourth year after passing Part I. Remember that if you sit both Parts in the same administration and fail or skip Part I, Part II is not graded. Part I and Part II can be taken on the same day only in the August window.
2. Map the six topics to your calendar. Give more weeks to topics where you have less work experience. A market risk specialist often needs extra time on operational risk and liquidity, and the reverse is also true. Leave the final two to three weeks for revision and mock exams only.
3. Read each reading with three questions in mind: what is the measure, how is it calculated or assessed, and what does the result tell a risk manager? Write the answers in a short note per reading. These notes become your revision material and work well on a phone.
4. Build a formula and definition sheet. Include VaR and expected shortfall methods, backtesting rules, correlation and term structure model features, credit loss measures, CVA components, and liquidity ratios. Rewrite it from memory each week until you can do it without looking.
5. Practise numerical questions by hand. Recompute each worked example step by step, then change one input and redo it. This shows you which inputs drive the answer and prepares you for questions that give extra, unneeded data.
6. Treat regulation and case readings as their own task. Learn the exact terms used in Basel documents and supervisory guidance, such as what each framework requires and who it applies to. For the case studies, list the failure, the cause and the control that would have prevented it.
7. Cover Current Issues early and revisit them. These readings include AI, private credit, geopolitical risk, government debt, crypto and digital resilience. Summarise each in a few lines: the main risk, the transmission channel and the policy response.
8. Take at least two full 80-question timed mocks in the last weeks. Review every wrong answer and every lucky guess. Log the cause: concept gap, calculation slip or misread wording. Then fix the pattern, not just the question.

Time management in the exam

• →You have 4 hours for 80 questions, which is an average of three minutes per question. Check your pace against that average at fixed points, for example after every 20 questions.
• →All questions carry equal weight. Do not spend six minutes on one hard calculation when two easy conceptual questions are waiting. Flag it and move on.
• →Read the last line of the question first to see what is asked, then read the scenario. This stops you from doing extra calculations or missing a qualifier such as the one-day horizon or the confidence level.
• →On a first pass, answer everything you can in under three minutes and flag the rest. Use the second pass for flagged calculations. Always choose an answer before moving on, in case you run out of time.
• →For numerical questions, check units, signs and the time scale before committing, such as annual versus daily, or loss versus return. Many wrong options are built from exactly these slips.
• →Keep ten to fifteen minutes at the end to revisit flagged questions. Change an answer only when you find a clear reason, not a vague doubt.