FRM 2008 Handbook questions _ should I take a look at it?

[sridhar]

I am starting to focus on practice tests, Bionic quizzes etc. Perhaps this is not the time to ask this -- but should I also try to set aside time to attempt the questions in the body of the FRM 2008 Handbook. I don't want to overdo the exams from multiple-sources at the expense of coherence and keeping everything in focus.

To be honest, I have not really dug into the Handbook. I do plan to do all the FRM Practice exams from the CD at the back of the handbook -- I think this is also in the Bionic site, I'd guess.

David, what's your pragmatic advice? I am a little concerned that if I look at the Handbook now, I might be staring at material using perhaps different conventions and symbols and then end up worse off than before. And sacrificing quality at the expense of quantity. I think I am starting to get control of the material (Study Notes, readings, my hand-written flashcards, Screencasts etc.)

So, I am basically looking at time management issues here.

Question: should I take a look at the questions in each chapter of the FRM Handbook?
("No need" would be the right answer]

I know it is difficult to have a one size fits all answer.....

--sridhar

 

[David Harper CFA FRM]

Hi sridhar,

You sound like you are in a good position! I partly agree with your concern in regard to the handbook; this was an issue last year (after last year's test many candidates objected that historical practice questions, *especially* those on the CD-ROM were not relevant to the exam they sat for). Here is an example today of a potentially distracting question. I voiced my concern to GARP in particular about the CD-ROM; I had some really qualified customers last year (who passed) who made a strong case that it was not completely helpful.

I've been fielding quite a few questions from the handbook. As a general statement, the older the question, the less relevant is seems to be (e.g., questions from 1998, 1999, 2000 are often not relevant).

But, Jorion is really excellent, so i find the content of the handbook to be really strong. (He is impressively precise, beyond most other authors). In regard to the questions, I would CHERRY-PICK THEM

I just flipped thru the handbook chapters. Here is my quick impression. In parens (), you can see a few chapters are basically irrelevant. The others (in my opinion!) contain material that is useful/relevant or both. I hope this helps a bit. Parens () means not helpful.

1. Bond
(2. Gujarati is more relevant)
3. Stat
4. MCS, fine but more than needed maybe
5. Derivatives, useful
6. Options, useful
7. FI, useful (note Jorion is annual while Tuckman is semiannual; GARP dropped Mortgage Backed Securities....)
8. FI derivitives, mostly useful - a bit more than needed
9. Markets, semi-useful. The assigned Hull is more relevanat
10. Market risk. Very useful. Lots of testable stuff
11. Useful but better is Jorion's are assigned Chapter in 3rd Ed book
12. Hedging, useful
13. Options, useful
14. Risk factors, very relevant
15. VaR methods, very relevant
16. RAPM, useful
17. Hedge funds, okay (won't hurt) but overwhelmed by assignments
18. Intro credit risk, semi-useful (overwhelmed by assignements)
19. Actuarial, useful
20. Default risk, relevant
21. Credit exposure, HIGHLY useful and relevant esp. as the assignments are not good introductions to counterparty exposure
22. Structured products, useful and relevant
23. Credit portfolio, useful and relevant
24. OpRisk, useful & relevant
25. RAROC, relevant but overwhelmed by Crouhy assignment
(26. Firm-wide. Generally not updated)
26. Relevant for nettting and SOX
(28. No accounting in 2008 FRM except Culp Ch 16 FAS 140 & FIN46R)
(29. Not really in 2008 cirriculum)
30 and 31. Basel/Basel II. Highly useful and relevant. A great, brief summary.

 

[sridhar]

David,

You are so comprehensive and thorough! Your response is very helpful. Let me seek clarification based on your response:

1 I want to take a whack at the in-chapter questions based on my studies so far. You recommend, I try the questions from 2001 and later....Correct? Skip questions from 2000 and earlier.

2. You have pointed out some chapters that Jorion presents in a compelling fashion -- so if I've time, give it your attention.

3. Again, since my goal is to get "practice time", I want to spend more time with questions and trying to answer them, discover areas of weaknesses and shore them up.

Thus, I am seeking tactical advice....Would you recommend, I set aside 2-3 days to go through the Handbook questions only -- based on readings I've done elswhere. Knowing me and my study habits, I am apprehensive of getting bogged down. Again, should I set aside time for attempting questions from the Handbook?

There are three sets of FRM Practice Exams in the CD - I am planning to work through them. I was wondering if the questions within the chapters of the Handbook are already reflected in the Practice Exams? Again, I am asking about tactics....

 

[David Harper CFA FRM]

Hi sridhar,

1. I don't have a concrete rule, it is just an observation based on submitted questions here. I would say, if time is limited, i might be biases toward more recent questions
2. Yes, the ones highlighted above (relevant/useful) I feel are a good use of time
3. Well, yes, maybe some limited time with the handbook is useful. But, on the other hand, assigned readings and chapters are always time well spent.

I don't know the last. I have been thru the three practice exams (2006-2008) but I have not been thru all the handbook questions and, perhaps i was soured on the CD-ROM by last year's customers, so i have not looked at that at all (i develop my questions directly from assigned readings).

David