FRM Level 2 Training

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About the course

Why take FRM Level 2 Training?

FRM Part II builds on the tools of Part I and tests how to apply them to real risk management situations. GARP describes the exam as 80 multiple-choice questions emphasising application, covering market risk, credit risk, operational risk and resilience, liquidity and treasury risk, risk management and investment management, and current issues in financial markets.

This course takes you through each topic area. In market risk, you study VaR approaches and their limits, valuation of fixed income and derivatives, and the Basel treatment of trading books. In credit risk, you study credit analysis, credit scoring and rating models, counterparty credit risk, structured credit and credit capital. Operational risk and resilience covers frameworks, identification and assessment, scenario analysis, cyber and third-party risk, and resilience. Liquidity and treasury risk covers funding liquidity, market liquidity, liquidity regulation and the management of the banking book. The investment management section looks at portfolio construction, hedge funds and risk-adjusted performance. Current issues cover topics such as climate risk, fintech and other themes GARP selects each year.

Question practice is central to the course. We follow the curriculum for your exam year, and you should check garp.org for the latest readings and any changes.

Who should attend

● Candidates who have passed or are completing FRM Part I
● Market, credit and operational risk professionals
● Treasury, ALM and liquidity risk specialists
● Portfolio managers and analysts focused on risk
● Regulators and consultants working with financial institutions

Prerequisites

● GARP recommends completing FRM Part I first; check garp.org for current sequencing rules
● FRM Part I level knowledge of statistics, derivatives and valuation
● Two years of relevant work experience are required to earn the FRM designation

What this certification does for you

Completes the FRM pathway

Part II is the second of two exams required.

Applied focus

Reinforces real-world risk management decisions.

Wide relevance

Covers market, credit, operational, liquidity and investment risk.

Recognised by employers

FRM is cited in risk roles in banks and asset managers.

Curriculum

9 modules, step by step

MODULE 1

Market risk measurement and management I

Measure market risk.

› VaR methods and backtesting
› Expected shortfall and coherent risk measures
› Stress testing and scenario analysis
› Market risk limits and governance

MODULE 2

Market risk measurement and management II

Handle complex positions.

› Fixed income and interest rate risk
› Option risk and Greeks hedging
› Volatility and correlation modelling
› Basel market risk capital

MODULE 3

Credit risk measurement and management I

Analyse credit exposure.

› Credit analysis of corporates and sovereigns
› Rating systems and scorecards
› Expected and unexpected loss
› Credit portfolio risk

MODULE 4

Credit risk measurement and management II

Cover counterparties and structured credit.

› Counterparty credit risk and CVA
› Credit derivatives
› Securitisation and structured products
› Credit risk capital under Basel

MODULE 5

Operational risk and resilience

Manage non-financial risk.

› Operational risk frameworks and taxonomy
› Risk and control self-assessment, KRIs
› Scenario analysis and loss data
› Cyber, third-party risk and operational resilience

MODULE 6

Liquidity and treasury risk

Manage liquidity.

› Funding and market liquidity risk
› LCR, NSFR and liquidity stress tests
› Interest rate risk in the banking book
› Contingency funding plans

MODULE 7

Risk management and investment management

Apply risk to portfolios.

› Portfolio construction and risk budgeting
› Hedge funds and alternative investments
› Performance attribution and risk-adjusted returns
› Fund governance

MODULE 8

Current issues in financial markets

Discuss emerging themes.

› Climate and sustainability risk
› Fintech, digital assets and AI in risk
› Regulatory developments
› Case studies of recent events

MODULE 9

Exam strategy and mock exams

Prepare for the 4-hour exam.

› Question practice by topic
› Timed mocks and review
› Time management
› Final revision plan

Certification exam

FRM Exam Part II

Awarded by	GARP (Global Association of Risk Professionals)
Format	Multiple choice, computer-based
Questions	80
Duration	4 hours
Passing score	GARP does not publish a fixed passing percentage; see the current figure on garp.org
Exam fee	Exam fee of US$600 (early) or US$800 (standard) per GARP's fee page; the one-time US$400 enrolment fee is paid at Part I registration; taxes extra
Where	Testing sites worldwide, offered in May, August and November
Validity	FRM designation requires two years of relevant work experience after passing both parts; see garp.org for ongoing certification requirements

Your path to certification

1
Enrol in an FRM Part II batch and follow the study plan
2
Register for your chosen exam window on garp.org
3
Complete practice questions and mock exams
4
Sit and pass FRM Part II
5
Submit your relevant work experience to GARP to earn the FRM designation

Skills you will gain

Market risk measurement

Apply VaR, expected shortfall, stress tests and trading book rules.

Credit risk analysis

Measure credit exposure and ratings, and understand counterparty and structured credit risk.

Operational risk and resilience

Identify, assess and control operational risks and build resilience.

Liquidity and treasury risk

Manage funding, liquidity buffers and interest rate risk in the banking book.

Investment risk management

Understand portfolio construction, hedge fund risks and performance measures.

Regulatory capital

Link Basel framework requirements to risk measurement.

What you get