IFMP Risk Management Certification (RMC), Pakistan study plan

Define risk versus uncertainty and classify market, credit, liquidity, operational and strategic risk with one Pakistan-market example for each.

Reconstruct the full risk management cycle - identification, measurement, monitoring, control and reporting - and map each stage onto the eight RMC domains.

Compute two-asset portfolio variance and covariance for a PKR-denominated portfolio and explain quantitatively how correlation drives diversification benefit.

Explain the three VaR parameters (confidence level, horizon, observation window) and convert a one-day VaR into a ten-day VaR using the square-root-of-time rule.

Distinguish parametric, historical-simulation and Monte Carlo VaR by stating one assumption and one failure mode for each.

Compute VaR by all three main methods from the same 250-day return dataset and reconcile why the three answers differ.

Derive Expected Shortfall from a loss distribution and justify why regulators and risk committees increasingly prefer it to VaR at high confidence levels.

Compute price value of a basis point, duration and convexity for a bond position and estimate the P&L impact of a 100bp parallel shift in the PKR yield curve.

Classify FX exposure into transaction, translation and economic exposure and quantify the transaction loss on an unhedged import payable under a 10% PKR depreciation.

Distinguish delta, gamma and vega exposures on a simple option book and explain which Greeks matter most near expiry.

Assess equity, commodity and fixed-income exposure in a trading book and rank which positions drive the largest one-day loss.

Compute expected loss as PD x LGD x EAD for five obligors and show how collateral and guarantees change each LGD input.

Contrast expert-judgement, scorecard and statistical/rating-migration credit models on data needs and predictive power.

Identify concentration, sectoral, related-party and foreign-currency lending risks relevant to Pakistani banks and explain how single-obligor and related-party exposure limits constrain them.

Reconstruct non-performing loan classification and provisioning categories and trace how a downgrade flows through provisioning charges, profit and regulatory capital.

Compute credit risk-weighted assets under the standardised approach by mapping external ratings to risk weights and applying credit risk mitigation rules.

Categorise operational risk loss events using the standard event-type taxonomy and match each type to a realistic Pakistani banking or brokerage scenario.

Compute operational risk capital under the basic indicator approach and explain when the standardised approach is preferable.

Design three Key Risk Indicators with thresholds that would give early warning of a control breakdown in a treasury or settlement unit.

Build a risk and control self-assessment for a treasury or settlement unit, scoring eight risks on likelihood and impact and naming the control owner for each.

Separate funding liquidity risk from market (trading) liquidity risk and identify the balance-sheet signals that precede each.

Compute the Liquidity Coverage Ratio and Net Stable Funding Ratio from a simplified balance sheet and interpret whether each passes the regulatory minimum.

Explain the purpose and contents of a contingency funding plan, including the early-warning indicator dashboard that triggers it.

Perform a maturity-ladder gap analysis and explain how a funding gap in the 1-3 month bucket translates into refinancing risk.

Distinguish three lines of defence roles and specify what the board risk committee, CRO and internal audit each own in the risk framework.

Draft a risk appetite statement that converts strategy into quantitative appetite and tolerance limits across credit, market, liquidity and operational risk.

Explain how risk limits cascade from board appetite through business-line limits to dealer or branch-level triggers, and what escalation is triggered by a breach.

Map the regulatory architecture affecting Pakistani financial firms - central bank prudential regulations and Basel III capital rules, securities-market regulation, and anti-money-laundering reporting duties - to the risks each addresses.

Explain the capital stack (Common Equity Tier 1, Additional Tier 1, Tier 2), minimum ratios and buffers, and how a breach constrains dividends and growth.

Outline the internal capital adequacy assessment process and the role of stress testing and scenario analysis in capital planning.

Apply the COSO-style enterprise risk management components to a firm and identify which component is weakest when risk culture fails.

Compute a risk-adjusted return on capital for a lending decision and compare it with a flat return-on-equity view.

Complete a timed full-length practice set spanning all eight domains under exam conditions without notes or pauses.

Diagnose every incorrect answer by domain and root cause, then rank the three weakest areas for targeted revision.

Rehearse the formula sheet from memory, reproducing VaR, expected loss, duration, LCR, NSFR and RAROC formulas without reference.

Prepare a one-page exam strategy covering question sequencing, time per item, and the decision rule for flagging and returning to calculation-heavy items.