Questions on the FRM Part 1 Exam

FRM
#1

Hi,

I am a current college senior majoring in Math/Econ. After I grduate from my current school, I am going to study Financial Engineering for two more years. Ultimately, I am interested in breaking into the risk management department within an investment bank.

I was actually pursuing the actuarial field for my career and have passed two actuarial exams (probability and financial mathematics). In addition, I am going to take the third exam (models for financail economics) in March. That exam deals with options pricing(binomial model, black-scholes formula, ito calculus, etc).

Here are my questions:

  1. Would passing an FRM part 1 exam be beneficial if I want to get an internship in the risk management team within an investment bank?

  2. Assuming no finance background, how much time is needed to study and pass the FRM part 1 exam? How difficult is it?

  3. Any other advice if I want to pursue the risk management field?

Thank you.

#2

  1. Yes I would imagine if you are applying specifically for risk managment based postions, then having sat for and passed FRM 1 would definitely give you an edge over other students looking for an internship in the same field. It won’t make you a risk expert (you need real life experience for that), but it will allow you to talk to anyone who interviews you in a way that shows you have a decent grasp of the fundementals…and should give you confidence.

  2. You say “assuming no financial knowledge” - but yet you are a maths/econ major. I don’t know the ins and outs of your course subject matter but I would imagine it wouldn’t be too difficult to pick up the finance specific knowledge you need, saying as you most likley have a strong quantitative background. It’s MUCH easier to teach a quant minded non-finance guy the finance info they need, than it is to teach a non-quant guy who has had exposure to financial markets, the quant knowledge they need. So I would bet you’re in a good position to do well on the exam. They recommend about 250 hours of study per level I believe. I think this is a decent goal to aim for. If you’re already comfortable with option pricing and the actuarial stuff, probabilties etc etc etc - then you may have actually seen a large portion of the material before.

  3. I don’t work in risk management per se, so I don’t have anything overly insightful to reveal.