FRM Coaching Program

• Understanding of Descriptive and Inferential Statistics.
• A flavor of probability, distribution like Normal distribution, lognormal distribution, Chi-square distribution etc. for statistical testing and application.
• Understanding of how to apply regression and time series analysis in risk management and forecasting ex-ante risk..
• Weightage of this section is 20%

• Portfolio construction : Here, we’ll learn to construct an efficient portfolio. We’ll discuss the concept like Harry Markowitz's efficient frontier and Capital asset pricing model. This subsection gives a glimpse of risk - return trade off with different financial ratios like Sharpe Ratio, Treynor ratio and others.
• GARP code of conduct (Ethics) : Ethics is a very important ingredient of financial risk manager. GARP code of conduct helps candidates to understand the do's and don’ts in the financial world.
• Financial disasters and case study : This subsection highlights some past mishappening in the financial world, helps students to understand each case to save the financial world from future financial disasters like ENRON and LTCM. Understanding of the Ponzi scheme and incorrect approach in financial risk management is also covered.
• Arbitrage pricing theory : It is an important concept to price any financial instrument on the planet. Once understood properly this will be leveraged in pricing of derivative and bonds in other sections of FRM level 1.

• It's one of the most complex and voluminous sections. It stands at a whooping weight of 30%. As the name suggests, this section helps to understand the basics of Financial market instruments like future, forward, equity options, swaps and fixed Income.
• This section does not talk much about equity but delves in the discussion of the derivative products on equity and other instruments.
• Candidates need to understand the pricing, payoffs and features of the financial instruments properly to score well in this section.

What you learn:

• This section is all about Value at risk and extreme measure of risk like Expected shortfall and unexpected loss. Candidates will develop a good understanding of stress testing, scenario analysis, which is one of the key features in calibrating regulatory risk and Enterprise level risk.
• This section is also embedded with the concept of bond and option valuation. The weightage to this section is 30%.
• This section can further be segregated into the following -
  
  • Valuation : Discuss some of the most interesting valuation concept of options like binomial model, BSM model etc. This section gives you a glimpse of Greeks in option and bond valuation.
  • Risk management: Make you familiar with the concept like VAR, Estimated Shortfall and Stress testing. This subsection is discussed in FRM level 2 in a very exhaustive manner.

• VaR and other risk measures (parametric and non-parametric methods of estimation, VaR mapping, Backtesting VaR, ES and other coherent risk measures, Extreme Value Theory (EVT))
• Modeling dependence: correlations and copulas.
• Term structure models of interest rates.
• Volatility: smiles and term structures.
• Fundamental Review of the Trading Book (FRTB).

• Credit analysis
• Default risk: quantitative methodologies
• Expected and unexpected loss
• Credit VaR
• Counterparty risk
• Credit derivatives
• Structured finance and securitization

• Principles for sound operational risk management.
• Risk appetite frameworks and enterprise risk management (ERM)
• Risk culture and conduct
• Analyzing and reporting operational loss data
• Model risk and model validation
• Risk-adjusted return on capital (RAROC)
• Economic capital frameworks and capital planning
• Stress testing banks
• Third-party outsourcing risk
• Risks related to money laundering and financing of terrorism
• Regulation and the Basel Accords
• Cyber risk and cyber resilience
• Operational resilience

What you learn:

• Liquidity risk principles and metrics
• Liquidity portfolio management
• Cash-flow modeling, liquidity stress testing, and reporting
• Contingency funding plan
• Funding models
• Funds transfer pricing
• Cross-currency funding
• Balance sheet management
• Asset liquidity

What you learn:

• Factor theory
• Portfolio construction
• Portfolio risk measures
• Risk budgeting
• Risk monitoring and performance measurement
• Portfolio-based performance analysis
• Hedge funds

What you learn:

• Reference rates
• Artificial intelligence (AI)
• Machine learning, and “big data”
• Risk management implications of COVID-19 Phasing out of LIBOR
• Climate risk
• Cyber resiliency in the wider financial system