"How hard is the FRM exam?" is the most common question from candidates considering the Financial Risk Manager certification. It's a fair concern—you're about to invest hundreds of hours and thousands of dollars into this pursuit. You deserve an honest answer.
The straightforward answer: FRM is a challenging exam that requires serious preparation. With pass rates hovering around 45% for Part I and 55% for Part II, more candidates fail than pass on their first attempt. But "hard" is relative—with proper preparation, the right background, and sufficient study time, most motivated candidates can pass.
This guide provides a comprehensive, data-driven analysis of FRM exam difficulty. We'll examine historical pass rates, break down the hardest topics, compare FRM to other certifications, and share strategies that successful candidates use to pass.
The Quick Answer: How Hard Is FRM?
On a difficulty scale, FRM ranks as follows:
FRM difficulty comes from three main sources: (1) Heavy quantitative content requiring comfort with advanced statistics, calculus, and mathematical modeling; (2) Breadth of material covering everything from derivatives pricing to operational risk to current regulatory frameworks; (3) Time pressure with 100 questions in 4 hours (2.4 minutes per question), requiring quick recall and calculation speed.
FRM Pass Rates: Historical Data
Historical pass rates provide the most objective measure of exam difficulty. Here's what the data shows:
FRM Part I Pass Rates (2019-2024)
FRM Part II Pass Rates (2019-2024)
What the Pass Rates Tell Us
- Part I is harder than Part II — Consistently 10-15 percentage points lower pass rate
- Pass rates are stable — GARP maintains consistent difficulty year over year
- Majority fail Part I — More than half of Part I candidates don't pass
- Part II self-selection — Higher pass rate partly reflects that only Part I passers sit for Part II
- ~25-30% overall pass-through — Only about 1 in 4 who start FRM complete both exams
The ~45% Part I pass rate means that even among motivated finance professionals who paid $600+ to sit for the exam, the majority fail. This isn't like a college exam where showing up and studying a bit guarantees a pass. FRM requires serious, sustained preparation. Don't underestimate it.
Part I vs Part II: Which Is Harder?
Candidates frequently debate whether Part I or Part II is more difficult. Here's a detailed comparison:
Why Part I Is Generally Considered Harder
1. More intensive quantitative content
Part I's Quantitative Analysis and Valuation & Risk Models sections require strong mathematical skills. You'll encounter questions on probability distributions, hypothesis testing, regression analysis, Monte Carlo simulation, option pricing models (Black-Scholes, Greeks), and VaR calculations. Many candidates struggle with the pure math.
2. More formulas to memorize
Part I has significantly more formulas that must be memorized and applied quickly. From the Black-Scholes equation to duration/convexity formulas to various probability distributions, the formula load is heavy.
3. Less room for intuition
In Part II, work experience and business intuition can help you reason through questions. Part I is more mechanical—you either know the formula and can execute the calculation, or you don't.
4. First exam hurdle
Part I is many candidates' first exposure to the FRM exam format and difficulty. By Part II, survivors have learned how to study effectively for GARP exams.
Why Some Find Part II Harder
1. Broader curriculum
Part II covers more topics: market risk, credit risk, operational risk, liquidity risk, investment management, and current issues. The breadth can feel overwhelming.
2. More conceptual judgment
Part II questions often present scenarios requiring you to apply risk management principles rather than just calculate. This can feel ambiguous to candidates who prefer clear-cut math problems.
3. Current issues unpredictability
The "Current Issues" section (10%) covers recent regulatory changes and emerging risks. The readings change annually, and some candidates find this section unpredictable.
4. Assumes Part I knowledge
Part II builds on Part I foundations. If your Part I knowledge has gaps, Part II compounds the problem.
If you have a strong quantitative background (engineering, physics, mathematics), you may find Part I more manageable than candidates from non-quantitative fields. If you have work experience in risk management, Part II's application-focused questions may feel more intuitive. Your background significantly influences perceived difficulty.
The Hardest Topics on Each Exam
Based on candidate feedback, forum discussions, and topic-by-topic pass rate analysis, here are the most challenging areas:
FRM Part I: Hardest Topics
Hardest sub-topics: Linear regression (interpretation, hypothesis testing, multicollinearity), Monte Carlo simulation, time series analysis (ARMA, GARCH), volatility forecasting. Many candidates without statistics backgrounds struggle significantly with this section.
Hardest sub-topics: VaR mapping, option Greeks (delta, gamma, vega, theta, rho), Black-Scholes-Merton model, binomial tree option pricing, bond duration and convexity calculations. Requires strong calculus intuition and quick mental math.
Hardest sub-topics: Exotic derivatives, swap valuation, forward rate agreements, convertible bonds. The sheer variety of instruments to understand makes this section challenging, though individual concepts are manageable.
Hardest sub-topics: CAPM extensions, information ratio calculations, enterprise risk management frameworks. Generally the most accessible section, though ethics questions can be tricky with subtle distinctions.
FRM Part II: Hardest Topics
Hardest sub-topics: Credit Value Adjustment (CVA/DVA), counterparty credit risk, credit derivatives (CDS, CDO), probability of default modeling, exposure at default calculations. Combines complex math with nuanced conceptual understanding.
Hardest sub-topics: Fundamental Review of the Trading Book (FRTB), backtesting VaR models, expected shortfall, correlation modeling, volatility smiles/surfaces. Requires understanding both theory and regulatory implementation.
Hardest sub-topics: Basel operational risk capital calculations, model risk management, cyber risk frameworks. More conceptual than mathematical, but the breadth of frameworks and regulations to remember is challenging.
Hardest sub-topics: Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR), funds transfer pricing, contingency funding plans. Relatively straightforward calculations but requires understanding bank balance sheet dynamics.
Hardest sub-topics: Hedge fund risk factors, performance attribution, pension fund risk management. More intuitive for candidates with investment background.
Typical topics: Climate risk, AI/ML model risk, digital assets, recent regulatory changes. Readings change annually, making preparation unpredictable. Some years are easier than others.
Study Hours Required
Understanding the time investment helps you plan realistically and avoid under-preparation:
| Category | Part I Hours | Part II Hours | Total |
|---|---|---|---|
| GARP Recommended | 200-240 | 200-240 | 400-480 |
| Passing Candidates (Average) | 175-225 | 150-200 | 325-425 |
| Strong Quant Background | 120-160 | 130-170 | 250-330 |
| Non-Quant Background | 220-280 | 180-220 | 400-500 |
| Career Changers | 250-320 | 200-250 | 450-570 |
What Those Hours Actually Include
- Reading curriculum (40%): Going through textbooks/study notes for the first time
- Practice questions (35%): Applying knowledge to exam-style problems
- Review and reinforcement (15%): Re-reading weak areas, creating summary notes
- Mock exams (10%): Full-length timed practice exams under test conditions
Analysis of candidate surveys suggests 200 hours of quality study time per exam is the threshold where pass probability significantly increases. Candidates studying less than 150 hours have notably lower pass rates. Quality matters too—200 focused hours beats 250 distracted hours.
FRM vs CFA vs Other Certifications
How does FRM difficulty compare to other professional finance certifications?
| Certification | Pass Rate | Study Hours | Time to Complete | Quant Difficulty |
|---|---|---|---|---|
| FRM (Both Parts) | ~25-30% overall | 300-400 | 6-12 months | ⭐⭐⭐⭐⭐ |
| CFA (All 3 Levels) | ~10-20% overall | 900-1,200 | 2.5-4 years | ⭐⭐⭐ |
| CPA | ~50% per section | 300-400 | 12-18 months | ⭐⭐ |
| CAIA (Both Levels) | ~60% per level | 200-300 | 6-12 months | ⭐⭐⭐ |
| PRM (All 4 Exams) | ~60-70% per exam | 200-300 | 4-8 months | ⭐⭐⭐⭐ |
| Actuarial Exams (P, FM) | ~40-50% each | 300+ per exam | Varies widely | ⭐⭐⭐⭐⭐ |
Is FRM Harder Than CFA?
This is one of the most debated questions among finance professionals. The answer depends on how you measure "hard":
FRM is harder per hour studied:
- More advanced mathematical content (stochastic calculus, advanced statistics)
- Higher density of formulas requiring memorization
- More challenging derivatives pricing and risk modeling
- Steeper learning curve for non-quant backgrounds
CFA is harder overall:
- Three times the study hours required (900-1,200 vs 300-400)
- Takes 3-4 years vs 6-12 months
- Lower overall pass-through rate (~10-20% vs ~25-30%)
- Broader curriculum covering more topic areas
- Level III includes essay questions (no multiple-choice safety net)
"I've done both FRM and CFA. Hour for hour, FRM Part I was the hardest exam I've taken in finance—the quantitative depth is brutal. But CFA was harder overall simply because of the multi-year marathon. FRM is a sprint; CFA is an ultra-marathon."
Who Struggles Most (And Why)
Certain candidate profiles consistently have lower pass rates. Understanding these patterns can help you identify potential weaknesses:
Candidates Who Typically Struggle
- Non-quantitative backgrounds: MBA generalists, marketing, communications, humanities majors who haven't done advanced math since college
- Long gap since formal education: Professionals who graduated 10+ years ago and haven't studied quantitative material since
- Insufficient study time: Candidates who underestimate the exam and study less than 150 hours
- No practice exams: Those who only read material without practicing timed questions
- Studying too passively: Reading without working problems, highlighting without active recall
- Poor calculator skills: Unfamiliar with BA II Plus or HP 12C functions
- English as distant second language: Exam questions can be linguistically complex
Candidates Who Typically Succeed
- Quantitative backgrounds: Engineering, physics, mathematics, statistics, financial engineering graduates
- Recent graduates: Still in "study mode" with fresh academic skills
- Current risk professionals: Working with risk concepts daily reinforces learning
- Disciplined study habits: Consistent daily study over months, not cramming
- Heavy practice emphasis: Those who do 1,000+ practice questions
- Previous certification success: CFA, actuarial, or other rigorous exam passers
- Calculator proficiency: Fast, accurate with financial calculator
Strategies to Improve Your Odds
Based on analysis of successful candidates, here are the most effective strategies for passing FRM:
Begin 4-5 months before your exam date. Aim for 10-15 hours per week of focused study rather than cramming 40 hours in the final weeks. Consistency beats intensity for retention. Create a study schedule and track your progress against it.
The single biggest differentiator between passing and failing candidates is practice volume. Aim for 1,500+ questions across both parts. Don't just do questions—analyze your mistakes. Understand WHY you got questions wrong and revisit those concepts. Use GARP practice exams plus third-party question banks.
Calculator proficiency saves critical time on exam day. Learn time value of money functions, statistics functions, and bond calculations inside out. Practice until common calculations are automatic. Even saving 30 seconds per question adds 50 minutes across 100 questions.
Compile all key formulas into condensed reference sheets. The act of creating them aids memorization. Review these sheets daily in the final weeks. Include not just formulas but also key concepts, definitions, and frameworks that appear frequently.
Take at least 3-4 full-length mock exams under timed conditions before your exam. This builds stamina, improves time management, and reduces anxiety on exam day. Treat mocks seriously—sit for the full 4 hours without breaks or phone access.
Not all topics are equally weighted. In Part I, Valuation and Risk Models (30%) and Financial Markets and Products (30%) comprise 60% of the exam. Prioritize these areas. Don't neglect other sections, but allocate study time proportionally to exam weights.
Reading and highlighting feels productive but doesn't build exam skills. After studying a topic, close your notes and try to explain the concept from memory. Use flashcards for formulas. Teach concepts to others (or explain to yourself out loud). Active recall dramatically improves retention.
After your first pass through the material, identify your weakest topics through diagnostic quizzes. Spend disproportionate time on these areas. Many candidates fail because they avoid difficult topics rather than confronting them. Attack your weaknesses; don't just polish your strengths.
Can an Average Person Pass FRM?
One of the most common questions candidates ask is whether FRM is achievable for "average" people without exceptional quantitative abilities. The honest answer: Yes, but it requires commitment.
What "Average" Candidates Need
1. Realistic self-assessment
Honestly evaluate your math background. If you haven't done calculus or statistics since college, plan for extra foundational review. If probability distributions and regression feel unfamiliar, budget additional time. There's no shame in needing more preparation—plan for it rather than being surprised.
2. Willingness to invest the time
Average aptitude can be compensated with above-average effort. If a quant whiz might pass with 150 hours, you might need 250. That's okay—the certification is worth the same regardless of study hours. Be prepared to sacrifice evenings and weekends for several months.
3. Quality study materials
Don't rely solely on GARP's official readings, which can be dense and theoretical. Invest in third-party prep courses that explain concepts more accessibly and provide abundant practice questions. The right resources make complex topics more approachable.
4. Support system
Tell family and friends about your commitment. Their understanding of your reduced availability reduces friction. Consider a study group or online community for accountability and help with difficult concepts.
"I majored in English literature and hadn't done math since high school. I failed Part I the first time, passed the second time, and passed Part II on my first try. It took me longer than most—about 600 total hours—but the certification has been career-changing. Anyone can do it if they're willing to put in the work."
When You Might Struggle
Be cautious if:
- You've consistently struggled with quantitative subjects throughout your education
- You have very limited time available (less than 10 hours/week for several months)
- You're pursuing FRM solely for the credential with no interest in risk management
- You're unable to commit to months of sustained preparation
In these cases, consider whether FRM is the right certification for your situation, or whether you need to first address foundational gaps before attempting the exam.
FRM is a challenging exam with ~45% and ~55% pass rates for Parts I and II. It requires 300-400 hours of study, strong quantitative foundations, and disciplined preparation. It's harder than many professional certifications but achievable for motivated candidates who respect the challenge and prepare accordingly. The majority of candidates who fail do so because they underestimate the exam, not because they lack the capability to pass. Take it seriously, prepare thoroughly, and you can join the 60,000+ professionals who hold the FRM designation.
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