Is FRM Exam difficult? – A Student’s Perspective

The difficulty of the FRM exams, to an extent, can be assessed by the percentage of people clearing and not clearing the exams.

Approximately 46% of the candidates that take the Part 1 exam and 58% of the candidates that take the Part 2 exam clear it every year. The pass rate for Part 2 is naturally higher as these candidates are mostly those who have cleared the Part 1 exam. Let’s delve deeper to understand what makes the FRM exams challenging:

What is the exam structure?

Exam	FRM Part 1	FRM Part 2
Number of Questions (MCQs)	100	80
Duration	4 hours	4 hours
Topics Tested	4	6
Time available per question	2.4 minutes	3 minutes

• Part 1 focuses on the tools that are required to assess financial risk, while Part 2 focuses on the application of those tools.
• There is no negative marking in either of the exams.
• Time management remains a challenge for most candidates in both parts. While the time available per question is a bit more in the Part 2 exam, since the questions are much more qualitative, time management remains a big hurdle.
• You can expect an extract of a situation which is followed by a set of questions related to it.
• Questions from all the subjects are jumbled up, so the order of attempting the paper does not matter.

What is the pass percentage of FRM exam?

The FRM exam results do not tell you about the number of questions that you have answered correctly. The result, however, tells you whether you passed or not, followed by your subject-wise quartiles.

The quartile system of assessment judges your performance in relation to the fellow candidates.

Quartile	Percentile	Interpretation
1st	75th-100th	Excellent
2nd	50th-75th	Good
3rd	25th-50th	Fair
4th	0-25th	Poor

Generally, since the pass rates are close to 50%, it is considered safe if your scores in each subject fall above the 50^th percentile (i.e. in the 1^st and 2^nd quartiles). There is no exact way to know how many questions you need to answer correctly to clear the exam, however, as a thumb rule, answering 75% of the questions correctly is said to be a safe score.

Naturally, it is more important to score in the 1^st and 2^nd quartiles in the sections that hold maximum weightage. For details on weights and for analysis of the different sections of the exam, check out FRM Part 1 – Details and FRM Part 2 – Details.

Difficulty COmparison of FRM and CFA

• This is a very commonly asked question by many candidates who are planning on, or, are already enrolled with the CFA Institute. Obviously, the difficulty is subjective, especially when the two exams have different curriculums – while one is focused on the “returns”, the other focuses on the “risk”.
• However, the FRM exams are heavier on the quantitative side so they might seem difficult for those who dread quants as a subject.
• The CFA curriculum is bulkier and it is much more comprehensive. This is one reason why certain portions of FRM may seem a bit dry.
• Based on the difficulty level of the questions, both FRM Part 1 and Part 2 exams are considered a notch tougher than the CFA level 1 exam. But that makes the average scores of candidates higher in the case of the latter.
• The 2^nd and 3^rd levels are said to be tougher than both the FRM exams, but there is no meaningful comparison that could be done.
• If you’re studying from the Schweser Material, the level of questions asked in the exams are significantly higher than those that appear in the question banks. This disparity in the difficulty levels is relatively smaller if you look at the Schweser notes for CFA.

Tips that could make the frm exam less difficult for you

It cannot be denied that studying for the FRM would be easier for you if you are already working in the field of risk management. However, the curriculum does not assume that to be the case for all the candidates and it starts everything from the very beginning. Despite this, many do not clear the exams and some of the possible barriers can be removed by:

• Do not under-estimate the difficulty of the exams –
  Many candidates find the exam to be more difficult than they expected. As already mentioned above, the level of questions in the exam is significantly tougher than the ones that you will find at the back of every reading in the Schweser textbooks or the Schweser question banks. The question banks of Bionic Turtle are a bit tougher than those seen in the actual exams but it is advisable to practice from there. Scoring high on the Schweser mock exams can often create over-confidence while it does not represent the true difficulty of what is to come. The institute releases its sample paper approximately a month before the exam. That should help you correctly gauge the type of questions asked.

• Don’t give correct answers to the wrong questions –
  Another problem that occurs is that candidates do not read the questions properly. Since these are multiple-choice questions, every question will have 4 options, of which one will be correct. However, the other 3 options are not random and are given based on the common mistakes that you might make while answering, or, while reading the questions.  To be safe from reading the question incorrectly, it is advisable to encircle or mark the key-words in the question so that you do not mark the ‘false’ option for a question that is asking for the ‘true’ choice, for example. Breaking down the question also aids in comprehensively understanding the problem at hand.

• Don’t repeat your mistakes –
  Assuming that you are practicing throughout your preparation, you should be making a list of mistakes that you made while solving questions. (For example – “Forgot to remove the negative sign from the final answer”, “Forgot to add back the xyz”, “Used the xyz formula incorrectly”, or “forgot to clear the pre-written values in the calculator”, etc.). If you make a list of the common mistakes that you commit and look at this list a week and a day before the exam, you should be more conscious of double-checking on these areas that are critical specifically for you. This should reduce your error rate on the exams.

• Manage your time well –
  Since the paper does not have any negative marking, it does not make sense to leave any question unanswered. You can try to mark the relevant facts in a question. This shall help you remove all the irrelevant information. The ability to do so shall come with practice. Also, attempting in irregular order is useless as questions are jumbled. Therefore, sticking to a specific order is advisable. Obviously, spending too much time on one question can be very detrimental.

• Make a schedule and stick to it –
  Ultimately, the exams are crack-able and you need to customize a plan based on the number of days that you have available to study and the number of readings you need to cover, after leaving 15-20 days for revision. You can arrive at the number of chapters you need to finish per week and this includes practicing from the question banks otherwise you might surprise yourself toward the end when you look at the degree of disconnect between your study and answering the questions on the exam. Naturally, these plans should be realistically achievable and should supersede your day-to-day excuses.