Part of the expanding PassProfessor catalog: FRM Part II is the second examination for GARP’s Financial Risk Manager certification: 80 multiple-choice questions in 4 hours across six topic areas weighted 20, 20, 20, 15, 15 and 10 percent. GARP publishes no passing score; the FRM Committee sets the pass mark for each administration and results are reported as pass/fail with quartile rankings by topic area. This guide explains the format, the six topic areas and the path to certification.
The program is in the works, built on GARP’s published outline for this examination. Join the notify list and we will email you when enrollment opens — then use this guide to plan your preparation topic area by topic area.
Ask a room of FRM candidates what score they need to pass and you will hear confident numbers. None of them comes from GARP. This guide gives the honest position — what GARP actually publishes about scoring — alongside everything else a Part II candidate needs in one place: the format, the blueprint at its published weights, the fees on GARP’s current schedule, the certification path after the examinations, and a study method for each topic area. Preparing for the other part too? Start from the FRM Part I exam guide and its program page for that examination’s own blueprint — the two parts share a toolkit, not a syllabus.
Which examination is this guide about?
Part II of the Financial Risk Manager certification, administered by the Global Association of Risk Professionals (GARP). The certification is earned by passing Part I and Part II in sequence and demonstrating two years of professional work experience in a risk-related field. This guide covers Part II only: its question count, its time limit, its topic weights and its content are Part II’s own, and nothing here should be read across to the other part’s examination.
The real exam at a glance
| Fact of record | Detail |
|---|---|
| Credential | Financial Risk Manager (FRM), Part II of two examinations |
| Certifying body | Global Association of Risk Professionals (GARP) |
| Format | 80 multiple-choice questions, all equally weighted |
| Time | 4 hours (240 minutes) — about 3 minutes per question |
| Delivery | Computer-based testing, in May, August and November windows |
| Sequence | Part II presumes Part I mastery; candidates progress Part I, then Part II |
| Passing standard | Not published by GARP. The FRM Committee sets the pass mark for each administration; results are pass/fail plus quartile rankings per topic area |
| Calculators | Only GARP-approved calculators may be used (the TI BA II Plus and HP 10bII families) — confirm the current approved list at garp.org |
| Fees (GARP schedule) | Exam fee of $600 early or $800 standard per part on GARP’s 2026 schedule (the one-time $400 enrollment fee is paid at first Part I registration) — confirm current amounts at garp.org |
| Certification | Pass Part I and Part II, plus 2 years of professional work experience in a risk-related field |
How is FRM Part II scored?
GARP does not publish a passing score for the FRM. The FRM Committee sets the pass mark for each exam administration, and results are reported as pass/fail together with quartile rankings that show how a candidate performed in each topic area relative to other candidates. Any source quoting a specific score or percentage needed to pass is speculating — GARP has never published one, and this page does not repeat those guesses as fact. Two consequences follow for candidates. First, be sceptical of any preparation product that promises to get you “above the pass mark” by a number — there is no published number to be above. Second, prepare for breadth with no thin area: the pass mark is set for each administration against the whole paper, and the quartile rankings GARP returns with your result exist precisely because relative performance by topic area is the information GARP considers meaningful.
What does certification require, and what does it cost?
The examinations are two of three steps. The third is experience: two years of professional work in a risk-related field — risk management, trading, treasury, portfolio management, audit, risk consulting or technology, academia, and similar roles — submitted after both parts are passed. GARP allows up to ten years after passing Part II to submit it, and experience earned up to ten years before passing can count. Candidates who have not passed Part II within four years of passing Part I pay the enrollment fee again on re-registration. On GARP’s 2026 schedule, first Part I registration carries a one-time enrollment fee of $400, and each part’s exam fee is $600 early or $800 standard. Fees are set by GARP and change — confirm the current schedule at garp.org before registering. After certification, GARP recommends continuing professional development of 40 hours per two years.
The blueprint at its published weights
| Topic area (GARP FRM Part II) | Share of the examination | Practice questions |
|---|---|---|
| Market Risk Measurement and Management | 20 percent | 300 |
| Credit Risk Measurement and Management | 20 percent | 300 |
| Operational Risk and Resilience | 20 percent | 300 |
| Liquidity and Treasury Risk Measurement and Management | 15 percent | 225 |
| Risk Management and Investment Management | 15 percent | 225 |
| Current Issues in Financial Markets | 10 percent | 150 |
The topic areas, one by one
What does Market Risk Measurement and Management cover? (20 percent of the examination; 300 practice questions)
The measurement of market risk at institutional depth: advanced value-at-risk and expected-shortfall estimation, backtesting concepts, value-at-risk mapping, stress testing design, volatility smiles and skews, term-structure models, correlation and copula applications, liquidity-adjusted value at risk, the market-risk framework of the Fundamental Review of the Trading Book at concept level, and extreme value theory.
How should you prepare for Market Risk Measurement and Management? Practise mapping and aggregation items slowly first — they chain several Part I skills together, and errors compound along the chain.
Work the frameworks, not just the formulas: this area rewards knowing when expected shortfall answers the question value at risk cannot, and what a backtest exception actually evidences.
What separates strong candidates in Market Risk Measurement and Management? Strong candidates hold the area’s core identities and frameworks ready for use rather than ready for recognition: they can set up the standard calculation without hesitation, say what each term means institutionally, and spot the scenario detail that changes which tool applies. Review every practice error the same day, classify it — knowledge gap, misread scenario, or wrong method — and return to the area after a gap of several days so retention, not familiarity, is what carries you.
What does Credit Risk Measurement and Management cover? (20 percent of the examination; 300 practice questions)
Probability of default, loss given default and exposure at default, and the expected and unexpected loss built from them; ratings and rating migration; structural models in the Merton tradition and reduced-form concepts; credit value at risk; counterparty credit risk with credit valuation adjustment, netting and collateral; credit derivatives, centred on credit default swap mechanics and pricing concepts; securitisation structures and tranches; and wrong-way risk.
How should you prepare for Credit Risk Measurement and Management? Give counterparty risk its own pass: netting, collateral and wrong-way risk interact, and items test the interaction rather than any single piece.
Expected loss equals probability of default times loss given default times exposure at default — hold the decomposition in mind, because most credit items are that identity wearing a scenario.
What separates strong candidates in Credit Risk Measurement and Management? Strong candidates hold the area’s core identities and frameworks ready for use rather than ready for recognition: they can set up the standard calculation without hesitation, say what each term means institutionally, and spot the scenario detail that changes which tool applies. Review every practice error the same day, classify it — knowledge gap, misread scenario, or wrong method — and return to the area after a gap of several days so retention, not familiarity, is what carries you.
What does Operational Risk and Resilience cover? (20 percent of the examination; 300 practice questions)
The Basel operational-risk framework and its event types, loss data and the loss distribution approach, the capital approaches, cyber risk, third-party and outsourcing risk, model risk management, operational resilience and business continuity, fraud and conduct risk, and key risk indicators and controls at concept level.
How should you prepare for Operational Risk and Resilience? Treat resilience as distinct from recovery: the examined idea is absorbing disruption while continuing critical operations, not simply restoring them afterwards.
Learn the Basel architecture as a mechanism — what each component is for — because items test purpose and interaction more than labels.
What separates strong candidates in Operational Risk and Resilience? Strong candidates hold the area’s core identities and frameworks ready for use rather than ready for recognition: they can set up the standard calculation without hesitation, say what each term means institutionally, and spot the scenario detail that changes which tool applies. Review every practice error the same day, classify it — knowledge gap, misread scenario, or wrong method — and return to the area after a gap of several days so retention, not familiarity, is what carries you.
What does Liquidity and Treasury Risk Measurement and Management cover? (15 percent of the examination; 225 practice questions)
Market liquidity versus funding liquidity, liquidity risk measurement, the Liquidity Coverage Ratio and Net Stable Funding Ratio in structure with simple calculations, intraday liquidity, asset-liability management and maturity transformation, contingency funding plans, funds transfer pricing concepts, repo markets, and the liquidity lessons of the 2023 bank failures at concept level.
How should you prepare for Liquidity and Treasury Risk Measurement and Management? Study the failure cases alongside the ratios; the examination connects the rule to the run it was written to prevent.
Master the two ratios as structures: what counts in the numerator, what runs off in the denominator, and what the inflow cap does — the calculations are simple once the structure is secure.
What separates strong candidates in Liquidity and Treasury Risk Measurement and Management? Strong candidates hold the area’s core identities and frameworks ready for use rather than ready for recognition: they can set up the standard calculation without hesitation, say what each term means institutionally, and spot the scenario detail that changes which tool applies. Review every practice error the same day, classify it — knowledge gap, misread scenario, or wrong method — and return to the area after a gap of several days so retention, not familiarity, is what carries you.
What does Risk Management and Investment Management cover? (15 percent of the examination; 225 practice questions)
Portfolio construction and factor investing, risk budgeting and risk decomposition, performance measurement, hedge fund strategies, private markets, and enterprise risk management as practised in asset management.
How should you prepare for Risk Management and Investment Management? Keep performance measures from Part I fresh — they return here in portfolio dress, alongside measures such as M-squared and Calmar in the wider curriculum.
Risk budgeting is the hinge concept: items ask where a portfolio’s risk actually comes from, which is rarely where its capital sits.
What separates strong candidates in Risk Management and Investment Management? Strong candidates hold the area’s core identities and frameworks ready for use rather than ready for recognition: they can set up the standard calculation without hesitation, say what each term means institutionally, and spot the scenario detail that changes which tool applies. Review every practice error the same day, classify it — knowledge gap, misread scenario, or wrong method — and return to the area after a gap of several days so retention, not familiarity, is what carries you.
What does Current Issues in Financial Markets cover? (10 percent of the examination; 150 practice questions)
The annually refreshed area: artificial intelligence and machine learning in finance, climate and environmental, social and governance risk, crypto and digital assets, cyber and geopolitical risk, nonbank financial intermediation, and monetary-policy and debt developments. This program teaches the area as durable risk mechanisms — how each development creates, transmits or concentrates risk — rather than as headlines, because the topic list is republished by GARP every cycle.
How should you prepare for Current Issues in Financial Markets? Cover this area last in each study cycle and revisit it closest to your sitting, since it is the one area whose emphasis moves year to year.
Ask of every current-issues topic the same three questions: what risk does it create, through what channel does it travel, and what control answers it? That frame survives each annual refresh.
What separates strong candidates in Current Issues in Financial Markets? Strong candidates hold the area’s core identities and frameworks ready for use rather than ready for recognition: they can set up the standard calculation without hesitation, say what each term means institutionally, and spot the scenario detail that changes which tool applies. Review every practice error the same day, classify it — knowledge gap, misread scenario, or wrong method — and return to the area after a gap of several days so retention, not familiarity, is what carries you.
How should you study for FRM Part II?
Drill the calculations until the method is automatic. At about 3 minutes per question, there is no time to derive formulas from scratch. The standard setups — value at risk with its normal constants and square-root-of-time scaling, duration-based price approximation, expected loss as probability of default times loss given default times exposure at default, volatility updates with given parameters — must be reflexes, and every explanation in the companion program shows the full computation so review rebuilds the method.
Work the frameworks, not just the formulas. Especially in applied areas, items ask which tool fits the situation in front of you. For each framework, learn what question it answers, what it assumes, and where it breaks — that is the level at which the examination discriminates.
Learn from the failure cases. The curriculum’s disasters and bank failures are examined because each teaches a specific, nameable control failure. Know what failed and what would have caught it, not merely what happened.
Simulate under real conditions. Full length, real time limit, approved calculator only, no pauses. Stamina and pacing are part of what is being tested, and they only train at full length.
Respect the weights. Allocate study time roughly as GARP allocates questions, correct the allocation with your own practice results by topic area, and never let a favourite area consume the hours a weighted weakness needs.
How should you read your practice results?
Because GARP reports the real result as pass/fail with quartile rankings by topic area, the most useful way to read practice results is the same way: by area, in relative terms, over time. Read your results in four passes. First, rank your six topic areas against each other — with three areas at 20 percent and two at 15 percent, a weak area is never a rounding error on this paper. Second, split each area’s misses by kind: framework misses, where the wrong tool was chosen for the situation, repair differently from calculation misses, and both repair differently from mechanism misses, where a ratio or a structure was recognised but its moving parts were not understood. Third, watch where the scenario detail was missed — Part II items bury the deciding fact inside institutional narrative, and a miss log that records which detail decided each wrong answer is the fastest map of what to drill. Fourth, re-test weak areas in mixed company after a gap, because the sitting interleaves areas without labels and competence that depends on knowing the topic in advance is not yet competence.
Which computations recur across Part II?
A smaller set of calculations carries a large share of Part II’s computational marks, and each should be drilled as a standalone skill. Expected and unexpected loss from probability of default, loss given default and exposure at default; credit valuation adjustment at the level of exposure, default probability and loss severity; the Liquidity Coverage Ratio and Net Stable Funding Ratio as structured ratios, including what the inflow cap does to the coverage figure; risk contributions in a risk-budgeting exercise, where each position’s share of total portfolio risk is compared with its share of capital; and the standardised operational-risk architecture read as a mechanism — what the business indicator component scales with and what the internal loss multiplier rewards or penalises. None of these is arithmetically hard; all of them are easy to fumble when the structure underneath has only been recognised rather than understood, which is why this guide insists on mechanisms before methods throughout.
What does the sitting itself demand?
Part II allows about 3 minutes per question — more than Part I, because its questions are longer and more scenario-based, not because they are easier. Plan accordingly. Read the scenario for its deciding detail before reading the options; in applied items the options are usually all plausible somewhere, and the scenario is what makes one of them right here. Practise on the GARP-approved calculator you will actually carry, and at full length: 80 questions in 240 minutes is a stamina test as well as a knowledge test, and the final quarter of the paper is where tired candidates stop reading scenarios carefully — precisely the skill the paper most rewards. Decide in advance how a resistant question will be handled — mark, move, return with banked time — so that one hard item never spends another item’s minutes.
Frequently asked questions
How many questions are on FRM Part II, and how long is it? 80 multiple-choice questions in 4 hours, all equally weighted, delivered by computer-based testing in May, August and November windows. That is about 3 minutes per question — more than Part I, because Part II questions are longer and more scenario-based.
What score do I need to pass FRM Part II? GARP does not publish a passing score. The FRM Committee sets the pass mark for each exam administration, and results are reported as pass/fail with quartile rankings per topic area. Any website quoting a specific percentage needed to pass is speculating.
How is Part II different from Part I? Part I (100 questions) builds the toolkit — quantitative methods, markets and products, valuation models. Part II (80 questions) applies that toolkit inside institutions: risk measurement frameworks, regulation-shaped practice, portfolio risk management, and current issues. The companion Part I program page and Part I exam guide cover the first examination.
What does FRM Part II cost? On GARP’s 2026 schedule the exam fee is $600 early or $800 standard per part; the one-time $400 enrollment fee is paid at first Part I registration. Fees are set by GARP and change — confirm current amounts at garp.org.
How do I earn the FRM certification? Pass Part I and Part II and demonstrate two years of professional work experience in a risk-related field — risk management, trading, treasury, portfolio management, audit, risk consulting or technology, academia and similar roles. After passing Part II you have up to ten years to submit the experience, and experience earned up to ten years before passing can count.
Which topic areas carry the most weight in Part II? Market Risk, Credit Risk, and Operational Risk and Resilience carry 20 percent each. Liquidity and Treasury Risk and Risk Management and Investment Management carry 15 percent each, and Current Issues in Financial Markets carries 10 percent.
How is Part II weighted? Market Risk Measurement and Management 20 percent, Credit Risk Measurement and Management 20 percent, Operational Risk and Resilience 20 percent, Liquidity and Treasury Risk Measurement and Management 15 percent, Risk Management and Investment Management 15 percent, and Current Issues in Financial Markets 10 percent — GARP’s published topic weights.
What are quartile rankings? Alongside the pass/fail result, GARP reports how your performance in each topic area compares with other candidates, in quartiles. They show relative strength by area; they are not scores, and GARP does not convert them into a published passing figure.
How long do I have to submit my work experience? Up to ten years after passing Part II, and qualifying experience earned up to ten years before passing can also count toward the two-year requirement.
Does GARP recommend continuing development after certification? Yes. GARP recommends continuing professional development of 40 hours per two years after certification.
Are these GARP’s actual examination questions? No. Every PassProfessor question is original, written to GARP’s published topic outline. The companion program carries 1,500 original practice questions with an explanation for every question.
When will enrollment open? The program is in the works. Join the notify list on the companion program page or on this guide and we will email you when enrollment opens.
Disclaimer
PassProfessor is an independent exam-preparation provider; this guide is not endorsed by, affiliated with or sponsored by GARP. FRM and Financial Risk Manager are marks of the Global Association of Risk Professionals, used on this page as a factual reference to the certifying body’s examination. Examination details on this page are drawn from the official sources recorded below and are current as of November 2026; the certifying body’s official publications govern if anything here differs from them. The certification is awarded by GARP alone when its requirements are complete.