FRM Level 1 Syllabus 2017

Paper 1: Foundations of Risk Management (Weight 20%)

Risk Management: A Helicopter View

Corporate Risk Management: A Primer
Corporate Governance and Risk Management
What is ERM
Financial Disasters
The Standard Capital Asset Pricing Model
Arbitrage Pricing Theory and Multifactor Models of Risk and Return

Paper 2: Quantitative Analysis (Weight 30%)

Probabilities
Basic Statistics
Distributions
Bayesian Analysis
Hypothesis Testing and Confidence Intervals
Linear Regression with One Regressor
Regression with a Single Regressor
Linear Regression with Multiple Regressors
Hypothesis Tests and Confidence Intervals in Multiple Regression
Modeling and Forecasting Trend
Modeling and Forecasting Seasonality
Characterizing Cycles
Modeling Cycles: MA, AR, and ARMA Models
Volatility
Correlations and Copulas
Simulation Methods
Paper 3: Financial Markets and Products (Weight 30%)

Banks
Insurance Companies and Pension Plans
Mutual Funds and Hedge Funds
Mechanics of Futures Markets
Hedging Strategies Using Futures
Interest Rates
Determination of Forward and Futures Prices
Interest Rate Futures
Swaps
Mechanics of Options Markets
Properties of Stock Options
Trading Strategies Involving Options
Exotic Options
Commodity Forwards and Futures
Exchanges, OTC Derivatives, DPCs and SPVs
Basic Principles of Central Clearing
Risks Caused by CCPs: Risks Faced by CCPs
Foreign Exchange Risk
Corporate Bonds
Mortgages and Mortgage-Backed Securities

Paper 4: Valuation and Risk Models (Weight 30%)

Quantifying Volatility in VaR Models

Putting VaR to Work
Measures of Financial Risk
Binomial Trees
The Black-Scholes-Merton Model
Greek Letters
Prices, Discount Factors, and Arbitrage
Spot, Forward and Par Rates
Returns, Spreads and Yields
One-Factor Risk Metrics and Hedges
Multi-Factor Risk Metrics and Hedges
 External and Internal Ratings
Capital Structure in Banks
Operational Risk
Governance over Stress Testing
Stress Testing and Other Risk Management Tools