FRM study materials

[arnemartin]

Hi David,

First of all, I'm very impressed with this website and the services you are providing. It was highly recommended by a colleague of mine that passed the exam last year.

I have a question regarding reading materials. There are quite a few options out there and I'm not sure what to choose.
- GARP have the 2008 FRM Core Readings Course Pack (v1.0) that they provide which I understand includes approximately 2/3 of the core readings
- Quite a few of my colleagues have been doing the CFA and I've seen many Schweser boxes in the office. They also provide a set of reading materials for the FRM.

As of today I do have the Hull book and the book called Advanced Financial Risk Management by Van Deventer et.al.

What would you recommend me to buy?

Many Thanks,
Arne

 

[idalton]

Not to bud into your question arnemartin, but David if you could extend your answer to what would be the most optimal approach for studying for an exam like this also. I see three components included (Core reading, Screencasts, Study Notes) and how do they fit into the game plan (and also which tools are more important than the other)?

Thanks

 

[David Harper CFA FRM]

Hi Arne,

Thank you for passing along the positive feedback, it is really great to hear that.

Regarding the reading materials, I always recommend that you (an FRM candidate) purchase the Core Readings and, of course, actually read them. I realize the cost of everything adds up. But, if you are going to sit for the exam, I think the most important error to avoid is under-preparing in terms of time. GARP yesterday (Friday) told me their 2007 *passing* candidates self-reported study prep times of 100+ hours to 300+ and, in some cases, nearly 400 hours (yikes). So, yes the range varies, but my point is, if you are going to sit, I would commit and that would include buying and--here is the harder part--spending the time to read the source (core) readings in addition to any third-part prep help (like me or another). Regardless of your provider, I don't recommend skipping the source. The exam is difficult, repeated exposure will be required. (BTW, this seems to apply even for experienced pros. Not because of depth but breadth. We agreed, me and my GARP contact, yesterday that sometimes an experienced pro will be prone to underestimating the exam's breadth because he/she has experience, is highly confident, in one certain area).

On Schweser, I don't feel comfortable/qualified to make this sort of recommendation. One, I actually don't study their material; Two, I'm not objective. The best I can say, and it is sort of related to the above: given you may/will spend 100-200-250 or more (?) hours, it is logically worth spending a little up front time doing a bit of shopping/sampling/etc. To help with that, I've got samples of everything on the site. All of last year's movies are samples for the first 10-15 minutes, etc.

The Hull books is great to have. Hull's chapters are maybe 30-40% of market risk (Chapter 19 was dropped this year from the exam, but if you have the book, Chapter 19 is really great on volatility and will continue to cover testable materal; e.g., ewma, garch). I don't have the Van Deventer book, I wasn't aware of it, but I am a big fan of Kamakura and their cutting-edge CDO research (darn, now i have to buy another book!) This probably is a great book but, prima facie, I do not recommend its use simply for a practical reason: it's a crapshoot whether the material will be tested. (and I don't know about the Basel coverage, but our salient document here is the big framework published in Nov 2005/Jun 2006 so I'm not keen on Basel readings published before that!)

Here is (just) my thinking on readings. I think you have enough reading within the assigned. But, of course, learning risk is fun. So, if you want to stray, my recommendation is to only stray on basic topics. I wouldn't stray on credit derivatives, e.g., because you are just likely into stuff that won't be tested. I hope that helps, sorry for the length...David

Hi Ian,

To your list I would add, in my opinion, the most important element of any prep program: practice questions. If you are a planner, one approach is to work backwards from something like: "okay, I will designate October primarily for practice questions. So I must have cleared my other preparation by then (be done with the other stuff) by Oct 1st so I am cleared for lots and lots of practice questions. " Every year, too many candidates are stressing near the end, trying to learn, read, ramp up, etc. But you will be golden if, on October 1st, you've reviewed everything, and you are only doing practice questions (and lookups based on questions). Your probably already appreciate this, given you have the CAIA, but it's a huge mistake to skip taking (lots of) practice questions.

My original view on the BT program was the following sequence, but with overlap: first, read the source (core assigned), then watch the screencasts, then review the notes, then do practice questions. I think the best start, frankly for any program, is digging right into the core readings. (or if you are using the FRM Handbook, that is good, too). My only recent revision to that "master plan," based on feedback and conversation with (a few) passing customers last year, is that I now think it is a good idea to mix in practice questions along the way, quite aside from a devotion to them at the end.

That's not a specific answer but I will do my best with a proposed schedule soon! Thanks, David

 

[arnemartin]

Hi David,

Thanks a lot for your reply. Very helpful. Just one quick question if you happen to know. On the GARP website where you can buy the Core Readings there are quite a few texts under "Does NOT include the following Core Readings from the FRM 2008 Study Guide:". Do you know if GARP give you these readings or do I have to go get them myself? It says (Coming Soon) on each of them. I guess they will be made available for me to download when they are ready?

Thanks a lot.


Kind Regards,
Arne

 

[phwdisse]

Hi Arne,

I asked GARP within what time the "Coming Soon" reading would be ready. The told me last week it would be ready within six weeks.

Hereby there answer,

We anticipate the readings to be available in the next 6 weeks.

Once available, you will see a link on the GDL website that will take you directly to purchasing the supplemental readings.

If you should have any questions, please feel free to contact us again.

Sincerely,


Barbara Espinoza

GARP Digital Library Technical Support
Global Association of Risk Professionals
111 Town Square Place

Suite 1215
Jersey City, NJ 07310

201.719.7233

 

[arnemartin]

Thanks for your reply Paul. So that means we will have to pay additional money for the "(Coming soon)" stuff? Six weeks is pretty long time as well. Maybe it's better to get the books now to get a head start and to be able to follow Davids lectures..

Thanks!

 

[idalton]

I bought the "Essentials of Econometrics" because I didn't want to wait for GARP, but I screwed up and bought the 2nd edition instead of the 3rd edition. Is there that many changes in the chapters we are responsible for where I have to still buy the 3rd edition?

Thanks

 

[David Harper CFA FRM]

Hi Ian,

I don't have the 2nd Ed (b/c Econometrics is new to the exam). Because chapters 1 to 8 are fundamental (intro), much will surely still apply. However, in the preface he says, 3rd Edition author says:

* He added another chapter? so i'm not sure which one chapter is missing (from review, distributions, important distributions, inference)
* He adds the distinction btwn PDF & PMF and Bayes Thm (so you are missing that)

But, what you need to know is essentially: moments (mean, std dev, etc) versus sample moments; the FOUR distributions (normal, t, chi^2, F), inference (surely in yours: confidence, I/II errors, intervals), and regression (which is surely in yours)

I would just check the AIMs doc against your book. But my notes will summarize, too, of course...David

 

[sdoshi004]

Hi David

Looking at the study guide of FRM 2008, GARP has recommended more than one readings for each topics. Is it necessary to go through each readings. I understand from some blogs that you recommend to go through the source reading before starting with Handbook and Bionicturtle notes, but want to confirm, should I purchase all the readings as mentioned in 2008 FRM Guide?

Your response would be highly appreciated.

Thanks

Sumit

 

[David Harper CFA FRM]

Hi Sumit,

Definitely they've assigned multiple readings to some topics. If you look at the AIMs (do you have the AIMs?), you'll see that AIMS are assigned PER READING. So, topics are "merely" collections of related readings. As such, every reading can be tested. Strictly speaking, then, every reading should be read. I owe the community an update on the prioritization of readings (e.g., this is critical, that is an expendable reading). But, having spent several days immersed in the AIMs/readings, this year (2008) I observe less redundancy/overlap than in prior years. In short, the 2008 is a tighter cirriculum with fewer blatant redundancies; few if any of the readings can be omitted.

You might read this post about the Handbook. https://forum.bionicturtle.com/threads/frm-handbook-for-2008.202/
For 2008, in my opinion, the handbook is: a great resource, but not essential and far from sufficient. If budget and time are not an issue (how easy for me!), then yes of course, more learning is better. But the 4th Ed handbook was more relevant last year (2007) than this year (just my opinion, not GARP's view).

I hope that helps!

David