FRM Part 1
FRM Part 1, Financial Risk Manager
The FRM Part 1 (Financial Risk Manager) from GARP is the first of two exams for the globally recognized FRM designation. It covers quantitative foundations, probability, statistics, regression, time series, alongside risk management fundamentals, financial markets and products (bonds, derivatives, equity, commodities), and valuation and risk models including Value-at-Risk and stress testing. FRM is the premier credential for financial risk professionals.
FRM Part 1 Exam Overview
| Detail | Information |
|---|---|
| Full Name | FRM Part 1, Financial Risk Manager |
| Governing Body | GARP |
| Number of Questions | 100 |
| Time Limit | 4 hours |
| Passing Score | Not disclosed (quartile-based scoring) |
| Exam Fee | $800 (Nov 2026 standard registration) plus a $400 one-time enrollment fee for new candidates |
| Category | IT Certifications |
| C3RT App Available On | iPhone, iPad, and Mac |
| Official Source | GARP official website ↗ |
FRM Part 1 Content Areas and Domains
| Domain / Content Area | Exam Weight |
|---|---|
| Foundations of Risk Management | 20% |
| Quantitative Analysis | 20% |
| Financial Markets and Products | 30% |
| Valuation and Risk Models | 30% |
Domain weights are approximate and based on the GARP content outline. Always verify at the official source before your exam.
Topics Covered
- ✓ Foundations of Risk Management, risk governance, CAPM, Fama-French, market microstructure, GARP Code of Conduct
- ✓ Quantitative Analysis, probability distributions, hypothesis testing, linear regression, simulation, GARCH
- ✓ Financial Markets & Products, fixed income, futures, forwards, swaps, options, FX, commodities
- ✓ Valuation & Risk Models, VaR (parametric, historical, Monte Carlo), option pricing (Black-Scholes, binomial), bond risk
How C3RT Helps You Pass the FRM Part 1
Adaptive Practice
Questions adapt to your weak areas automatically so every study session on the FRM Part 1 is time well spent.
Diagnostic Mocks
Full-length mock exams timed to the real FRM Part 1 format with detailed score breakdowns by topic.
Mistake Bank
Every wrong answer is saved for targeted re-drill. The system resurfaces your mistakes until they stick.
Native on iOS & Mac
Built with SwiftUI, not a web wrapper. Instant load, offline support, hardware-speed rendering.
Sample FRM Part 1 Practice Questions
Q1.Given two random variables with zero correlation, which of the following statements is necessarily true?
- The variables are independent.
- The covariance between the variables is zero.Correct
- The variables have the same variance.
- The variables must follow normal distributions.
Zero correlation implies zero covariance since correlation is covariance normalized by standard deviations. However, zero correlation does not imply independence unless variables are jointly normal. Variables can have different variances regardless of correlation. Normality is not implied by zero correlation.
Q2.To establish a strong risk management culture, which element is most critical for a financial institution to implement?
- Regular training programs
- Comprehensive risk policies
- Clear communication channels
- Top management supportCorrect
Top management support is critical for establishing a strong risk management culture, as it sets the tone for the entire organization. While regular training, comprehensive policies, and clear communication are important components, they will lack effectiveness without the commitment and endorsement from leadership.
Q3.A portfolio manager is evaluating a bond futures contract that is priced at 98. If the underlying bond has a face value of $100,000, what is the dollar value of the futures contract?
- $98,000Correct
- $2,000
- $100,000
- $98
The correct answer is $98,000, calculated by multiplying the futures price (98) by the bond's face value ($100,000). The other options represent incorrect calculations or misunderstandings of the pricing mechanics of bond futures contracts.
FRM Part 1 Frequently Asked Questions
What does FRM Part 1 stand for?
FRM Part 1 stands for FRM Part 1, Financial Risk Manager. It is administered by GARP.
Who administers the FRM Part 1?
The FRM Part 1, Financial Risk Manager (FRM Part 1) is administered by GARP. For official information, visit the GARP website.
How many questions is the FRM Part 1?
The FRM Part 1 consists of 100 questions. Candidates are given 4 hours to complete the exam.
What is the passing score for the FRM Part 1?
The passing score for the FRM Part 1 is Not disclosed (quartile-based scoring), as set by GARP. Scoring methodology and passing standards may be updated periodically. Always verify current requirements with the governing body.
How much does the FRM Part 1 exam cost?
The FRM Part 1 exam fee is $800 (Nov 2026 standard registration) plus a $400 one-time enrollment fee for new candidates. This fee is set by GARP and may vary by testing centre, region, or membership status. Additional fees for registration or rescheduling may apply.
How difficult is FRM Part 1 and what math is required?
FRM Part 1 is quantitatively demanding. Candidates need solid probability and statistics, linear algebra, and calculus. Key topics include probability distributions, linear regression with ordinary least squares, time series analysis (AR, MA, ARMA, GARCH), and option pricing math (Black-Scholes greeks). Most candidates with finance or engineering backgrounds spend 150–200 hours preparing.
What is Value-at-Risk (VaR) and why is it central to FRM?
Value-at-Risk (VaR) estimates the maximum loss over a given time horizon at a specified confidence level. For example, "1-day 99% VaR of $1M" means there is a 1% chance of losing more than $1M in a single day. FRM Part 1 tests VaR calculation using all three approaches: parametric (using normal distribution assumptions), historical simulation, and Monte Carlo simulation.
When should I take FRM Part 1?
FRM exams are offered in May and November each year through Pearson VUE test centers globally. GARP recommends 150+ hours of study. Most candidates have backgrounds in finance, economics, engineering, or mathematics. FRM is valuable for roles in market risk, credit risk, operational risk, quantitative analysis, and risk consulting at banks, hedge funds, and financial regulators.
What is the pass rate for FRM Part 1?
GARP does not publish pass rates in terms of percentage, but reports quartile performance. Historically, FRM Part 1 pass rates have been approximately 40–50%, making it a challenging exam. FRM Part 2 has similar pass rates. GARP provides practice exams and the FRM Study Guide to help candidates focus on tested content.
C3RT is a native iOS and macOS exam preparation platform covering the FRM Part 1, Financial Risk Manager (FRM Part 1), a IT Certifications certification, administered by GARP. C3RT is not affiliated with or endorsed by GARP. Certification names and trademarks are the property of their respective organisations. For official exam registration, eligibility requirements, and content outlines, visit the GARP official website ↗ .