FRM Part I vs Part II: Topics, Format and How to Study Each (2026)

FRM Part I and Part II share a name, a format and a test centre, but they test different skills. Part I asks whether you can use the tools of risk management. Part II asks whether you can apply them to realistic problems at a bank, an insurer or an asset manager. Knowing the difference changes how you should study for each.

The two exams side by side

Both parts are offered in May, August and November. You can register for both in the same window, but GARP grades Part II only if you pass Part I.

Part I: the toolkit

Part I is the more calculation-heavy exam. Typical questions ask you to compute something: a value at risk figure, a hedge ratio, a bond's price change from duration and convexity, a forward price, an option value from a one-step binomial tree, or a regression statistic. The skill being tested is choosing the right method and executing it without setup errors (daily or annual volatility, one-tailed or two-tailed confidence levels, continuous or annual compounding).

Our guide to the final month before FRM Part I works through the calculations that come up most often.

Part II: applying the tools

Part II still has calculations, but more of its questions describe a situation and ask what it means or what a risk manager should do: why a backtest shows too many exceptions, which credit model fits a portfolio, how a liquidity stress test should change after a funding shock, what a new regulation means for capital. The questions are longer, which is why you get 3 minutes for each instead of 2.4.

Market risk, credit risk and operational risk together are 60% of Part II. Current Issues is only 10%, but its readings change every year, so it rewards reading the current year's material rather than old notes.

Why Part II feels harder, despite a similar pass rate

GARP's pass rates for the two parts are close (47% and 50% in November 2025). But the Part II pool is different: everyone sitting it has already passed Part I, or will only be graded if they do. A similar pass rate in a stronger field means the exam is demanding in its own way.

Candidates usually find three things harder in Part II:

• More reading per question. Long scenarios take time to parse before any calculation starts.
• Judgment, not just formulas. Two answers can be technically defensible; you have to pick the one that best fits the situation described.
• Breadth across six areas. One weak area costs more, because there are more areas of similar weight.

What carries over from Part I

A lot of Part I comes back in Part II, so do not let it fade between the exams:

• Value at risk and expected shortfall, which Part II extends to backtesting, model risk and the regulatory frameworks.
• Fixed income and derivatives, which are the basis for interest rate risk, counterparty credit risk and credit valuation adjustments.
• Probability and statistics, which underpin credit models and operational loss modelling.

One example of why current material matters: interest rate questions now use the risk-free reference rates (SOFR, SONIA, €STR and others) that replaced LIBOR, whose main US dollar settings stopped being published in June 2023. Older study notes that treat LIBOR as the live benchmark are out of date.

How to adjust your study between the parts

• Start Part II with a short Part I review. Spend a week on VaR, fixed income and derivatives before new material.
• Practise reading speed. Do timed sets of long questions and note where you lose time: reading, deciding or calculating.
• Weight your time by the 20/20/20/15/15/10 split, then by your own weak spots from a practice exam.
• Read the current year's Current Issues material rather than relying on older summaries.

How JephAi helps

JephAi covers both FRM parts:

• Full study chapters for every Part I chapter and every Part II theme, each with a formula sheet for that chapter.
• Exam-style questions with an explanation for every option.
• Timed mock exams with results by topic area.
• Jeph, an AI tutor you can ask about the chapter you are reading (Advanced plan).

Try JephAi free for 7 days, no card needed. Start your free trial.

Sources: GARP FRM exams page (format, exam windows and November 2025 pass rates) and GARP's 2026 topic weights for each part.