FRM Part II study plan

Compute 1-day and 10-day VaR for a single-asset and a two-asset portfolio using delta-normal, historical simulation, and Monte Carlo, and state the direction each method biases tail risk

Derive EWMA and GARCH(1,1) volatility forecasts by hand from a given three-day return series and compare them to a simple moving average

Apply the Kupiec proportion-of-failures test to a backtest exception count and classify the result under the Basel traffic-light zones

Map a fixed-income position to risk factors using duration-based and principal-component mapping, and quantify the mapping error

Hedge a bond portfolio with duration and convexity and quantify residual exposure after a 100bp non-parallel shift

Compute expected loss, unexpected loss, and economic capital for a loan portfolio from PD, LGD, EAD, and asset correlation

Calculate Merton distance-to-default and value equity as a call option on firm assets

Explain the cash-flow mechanics and payoff profiles of a CDS, a CDO tranche, and a total return swap

Estimate PD from rating transition matrices, structural models, and reduced-form models, and contrast their data requirements

Compute CVA for a plain-vanilla interest rate swap and identify a wrong-way-risk exposure

Interpret a counterparty exposure profile using EE, PFE, and EPE, and show how collateral and margin periods of risk shift the curve

Allocate collateral losses through a securitization waterfall by computing tranche attachment and detachment points

Compare CreditMetrics, KMV Portfolio Manager, CreditRisk+, and CreditPortfolioView on their default-correlation and loss-distribution assumptions

Compute regulatory capital for a given exposure under the foundation and advanced IRB approaches and explain the difference

Classify a set of loss events into Basel event types and business lines

Build a risk register with RCSA scoring and three KRIs with explicit thresholds and escalation triggers

Compute operational risk capital under BIA, the Standardised Approach, and the SMA, and explain why the SMA replaced the advanced approaches

Design a scenario-analysis workshop: select three tail scenarios, assign frequency and severity distributions, and aggregate them under the loss distribution approach

Map critical business services to RTO and RPO targets and identify third-party and concentration dependencies

Assess cyber, model, and AI/ML governance controls against model validation and change-management expectations

Compute the LCR and NSFR from a balance sheet and identify which line items move each ratio and in which direction

Distinguish funding liquidity from market liquidity and estimate a liquidation cost using bid-ask spread and holding-period adjustment

Build a 30-day cumulative cash-flow gap ladder and identify the largest funding gap and its driver

Explain funds transfer pricing, contingent funding plans, and central bank facility usage in a stress event

Measure portfolio VaR with a correlation matrix and decompose it into component and incremental VaR for risk budgeting

Evaluate hedge fund strategies on tail, liquidity, and leverage risk, and compute Sharpe, Sortino, and information ratios plus factor-regression alpha

Distinguish manager skill from style exposure using risk-adjusted performance attribution

Summarize two assigned current-issues readings into a risk-transfer argument with the key regulatory change and its portfolio impact

Consolidate one revision sheet per domain covering the five highest-yield formulas and definitions

Complete two full-length timed mocks and re-solve every incorrect item without notes

Re-drill the 20 most frequent recurring error patterns logged across weeks 1-7

Distill the current-issues readings into the five takeaways most likely to be tested