What is the GARP Financial Risk Manager (FRM®) certification?

The FRM certification validates expertise in assessing, measuring, and monitoring financial risk. It requires passing two exams (Part I: 100 questions, Part II: 80 questions) and two years of relevant work experience.

How many practice questions does frmmastery offer?

frmmastery includes a growing bank of multiple-choice practice questions tagged to the official GARP FRM Part I and Part II syllabus topics, with detailed explanations for each answer.

Is there a free trial for frmmastery?

Yes. You can try sample questions without signing up. Creating a free account unlocks 20 practice questions. Full access starts at $9.99.

Under the GARP Code of Conduct, if a member discovers that their firm has violated a local regulatory requirement regarding risk disclosure, what is the member's primary professional obligation?

Immediately report the violation to law enforcement and media outlets.

Disassociate from the violation, report the matter internally to appropriate compliance or executive authority, and escalate as necessary.

Resign immediately without communicating with internal management to avoid liability.

Alter the internal risk metrics to bring the published disclosures into mathematical compliance.

Which of the following enterprise risk management (ERM) failures was primarily highlighted in the 2012 JPMorgan 'London Whale' incident?

A rogue trader bypassing front-office trade entry controls using unrecorded personal accounts.

A flawed, newly introduced Value-at-Risk (VaR) model combined with weak spreadsheet controls and inadequate independent risk oversight.

An immediate liquidity run caused by tri-party repo counterparties refusing commercial paper collateral.

Failure to segregate execution and settlement duties within the trade lifecycle operations.

How does the Sortino ratio differ fundamentally from the Sharpe ratio?

It replaces excess return in the numerator with portfolio alpha.

It divides excess return over a target return by downside semi-deviation instead of total standard deviation.

It adjusts total risk for positive skewness using a log-normal distribution transformation.

It uses systematic beta in the denominator instead of total volatility.

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According to the Capital Asset Pricing Model (CAPM), what is the expected return of an asset with a beta of 1.5, assuming the risk-free rate is 3% and the expected return on the market portfolio is 9%?

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Questions before you start.

What is the GARP Financial Risk Manager (FRM®) certification?: The FRM certification validates expertise in assessing, measuring, and monitoring financial risk. It requires passing two exams (Part I: 100 questions, Part II: 80 questions) and two years of relevant work experience.
How many practice questions does frmmastery offer?: frmmastery includes a growing bank of multiple-choice practice questions tagged to the official GARP FRM Part I and Part II syllabus topics, with detailed explanations for each answer.
Is there a free trial for frmmastery?: Yes. You can try sample questions without signing up. Creating a free account unlocks 20 practice questions. Full access starts at $9.99.

Prepare for the FRM exam.

According to the Capital Asset Pricing Model (CAPM), what is the expected return of an asset with a beta of 1.5, assuming the risk-free rate is 3% and the expected return on the market portfolio is 9%?

Practice exams

Deep-dive explanations

Weakness targeting

One month access

6 months access

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