Passing criteria

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Hi David,


Please clear my following doubts :

1. Is there any sectional cutoff for FRM Nov 08 exam?
2. What is percentile or quartile system?
3. What is passing percentage?
4. How the passing criteria is decided?
5. How one candidate can infer that he will clear if gets what marks?

In a nutshell pls explain how one candidate can expect about clearing?



~Anil Lahoti

 

[David Harper CFA FRM]

Hi Anil,

I did not have an answer to this, but Dan Manzo of GARP was kind enough to provide the following answer:

David,

There is no defined minimum score in order to pass the exam. The exam is graded based on an aggregate score of all the students. Nor is the score broken down by sections. After the completion of the exam, we do provide the students a score in relation to what sections they did better on for future reference and how they did in comparison to their peers.


You can provide them with the FRM history link, http://garp.com/frmexam/frmhistory.asp, for candidate passing rates.

Or

The historical pass rate is noted below:

1997: 37.0%
1998: 42.9%
1999: 53.0%
2000: 53.3%
2001: 62.7%
2002: 58.9%
2003: 53.8%
2004: 52%
2005: 44%
2006: 44.75%
2007: 44.35%

I hope this helps.

Daniel Manzo
FRM Administrator
Global Association of Risk Professionals

 

[nikhiliimk]

Hey,
Can anyone tell me atleast the range in which one needs to score to be relatively on the safer side??
Thanks,
Nikhil

 

[David Harper CFA FRM]

Hi Nikhil,

GARP says that will set the pass as a ratio of the top 5% ... venkat was told by a competitor that will be 75% of top 5%
http://forum.bionicturtle.com/viewthread/2058/

... which i do not believe. But either way, it amount to the same utility going into the exam: I don't think the passing ratio can be known going into the exam. The new format has no precedents, GARP can't precisely calibrate ex ante

David

 

[nikhiliimk]

Hi David,
Thanks for the update.
One suggestion required:
I have gone through the Handbook and the material as given by one of the leading institutes, post that what can be the best way to further prepare in the last 15 days that we are left with?

Thanks,
Nikhil

 

[David Harper CFA FRM]

Hi Nikhil,

How can that be, are we not the leading institute?

curious, what is the "leading institute's" reply to this question?

last 15 days: easy. Nothing but practice questions ... and using the questions as a guide to refer/refresh material

.... (and for my valued customers, our kick arse review tutorial)

David

 

[nikhiliimk]

Hi Nikhil,

How can that be, are we not the leading institute?

curious, what is the "leading institute's" reply to this question?

last 15 days: easy. Nothing but practice questions ... and using the questions as a guide to refer/refresh material

.... (and for my valued customers, our kick arse review tutorial)

David​

Hi David,
Yours is a leading institute but in my part of the world, the other is more famous and hence all of us stuck to it.
They suggested the same thing as you did, but what I believe is that keeping all the formulas and small details is the main concern and hence I was planning to do one more revision of the Handbook and maybe preparing short notes.
Any pros/cons in your view with respect to this plan of action?

Thanks,
Nikhil

 

[David Harper CFA FRM]

Nikhil

Thanks, I will take whatever i can get...your plan is interesting...I believe successful styles vary and therefore I hesitate to suggest one method is better than another, but my *opinion* is:
The "con" of the approach is simply you may spend less time working practice questions ... I feel strongly you should work questions....reading and memorizing formulas can seem suddenly passive when you go to answer a question under the pressure of the exam...working questions will give you an "excuse" to peruse details anyway...

re: formulas: they are hard to memorize in a vacuum without practice... and GARP does not test esp well to formula memorizers

....I do like the handbook revision, that is a fine idea!
...but rather than details (there are too many details), I would prefer a focus on "themes" ...themes are adaptable and help you guess more effectively

David

 

[nikhiliimk]

David,
Thanks for the suggestion, actually I was planning to do something in similar lines.

Let me elaborate on what I am planing to do, i will pick up a chapter of Handbook, note down the key concepts and formulas, re-visit a few good problems from the past year given in the handbook itself and then move on to the next chapter.

As far as solving problems are concerned, as I am pursuing my MBA currently, so I am pretty well versed with the Market Risk part and the Quants section. For other parts, I am planning to solve a few of them but post the second revision of Handbook.

Please comment on this POA.

Thanks,
Nikhil

 

[David Harper CFA FRM]

Hi Nikhil,

I think it's good, sorry to stomp on my horse, if you don't short practice questions as you do this..

re: "I am pursuing my MBA currently, so I am pretty well versed with the Market Risk part and the Quants section"
The FRM has de-railed many MBAs due to over-confidence (I'm not saying that's you)...some MBA programs don't go to the same depth of quant ... I would be careful about making any assumptions...the quant and market risk probably will play a huge role (quant + market risk are disproportionately quizzed on the 2009 FRM samples) ... your MBA study may be excellent but it doesn't mean it's highly *relevant* to the exam ... because market & quant are such a big part, i would personally not given these areas any less b/c i was in an MBA (unless you have specific reason to map MBA to FRM, of course)...you still want familiarity with Jorion, Hull, Gujarati and Tuckman (as core)

David

 

[nikhiliimk]

David,
You have mentioned "FRM 2009 Samples", any idea where I can get them?

Thanks,
Nikhil

 

[David Harper CFA FRM]

Hi Nikhil,

I thought GARP sold sample exams...my paid customers have corrected, super-annotated versions .... David

 

[nikhiliimk]

Hi David,
i got it after a bit of searching, this should be a good indicator of how have I done so far. Thanks for the suggestions.

Thanks,
Nikhil

 

[nikhiliimk]

Hi David,
Does the Handbook covers all the required topics? Found a few variances between the Handbook and the material I am using.

Thanks,
Nikhil

 

[David Harper CFA FRM]

Hi Nikhil,

Definitely it does not ... the 5th edition handbook is basically unchanged from the 4th so the variance (IMO) is more significant for L2 than L1 ... as with the 4th, since Jorion wrote it (but not the questions), i *think* it's a great help in introduction to L1 and a mixed bag for L2 (the questions are definitely mixed bag b/c some are no longer relevant and some are absolutely incorrrect)

David

 

[nikhiliimk]

David,
Can you give me an indicative list of topics that the Handbook does not cover properly.
This question might have been asked previously but could not locate it

Thanks,
Nikhil

 

[David Harper CFA FRM]

Hi Nikhil

I don't have time to do that (I am working hard trying to support my paid customers)...but if you want to draft something that can be shared with the forum, I promise to add my review as time permits...David

 

[nikhiliimk]

Hi David,
Surely I agree to your commitments.
in your previous reply, you said that Handbook covers the L1 properly, does that mean that Credit Risk, Operational Risk and Basel II parts should be done from other materials as well?

Thanks,
Nikhil

 

[David Harper CFA FRM]

Hi Nikhil,

I think the handbook is an excellent *introduction* to all three (credit, ops, basel II)

but in regard to Credit & Ops: for the "new" L2 (since that material generally pre-dates L2), I think you almost *must* refer to the sources (many are simply not in the handbook)...it is not good strategy for credit and ops to use only the handbook

re: Basel: I think Jorion's Basel introduction (in the FRM handbook) is maybe the best you'll find anywhere. So, basel has more standalone utility. However, since it's not been updated (really), you still want to refer to the additional papers in the study guide (e.g, concentration, IRC, market risk revisions) and, definitely do not skip the 19-page Explanatory Note on Basel IRB (good bang for buck)...
...so for Basel, I think it's fine to use handbook PLUS the 6 or 7 additional Basel-related assignments (b/c much of that is definitely not in the handbook)

David

 

[ajsa]

Hi David,

could you elaborate "GARP says that will set the pass as a ratio of the top 5%"? that is impossible for me.

BTW I wonder what I should assume for the following in case the question did not specify?
1. for 95% VAR, should I use 1.65 or 1.645?
2. should I assume continuous compounding?

Thanks.

Hi Nikhil,

GARP says that will set the pass as a ratio of the top 5% ... venkat was told by a competitor that will be 75% of top 5%
http://forum.bionicturtle.com/viewthread/2058/

... which i do not believe. But either way, it amount to the same utility going into the exam: I don't think the passing ratio can be known going into the exam. The new format has no precedents, GARP can't precisely calibrate ex ante

David​