Free FRM Part 1 Practice Exam
FRM Part 1 practice exam with 100 questions covering all four GARP content areas: foundations of risk management (20%), quantitative analysis (20%), financial markets and products (30%), and valuation and risk models (30%). Approximately 42-47% pass rate.
About the FRM Part 1 Exam
The FRM (Financial Risk Manager) Part 1 exam is the first of two exams required to earn the FRM designation from GARP (Global Association of Risk Professionals). The FRM is the leading global credential for risk management professionals and is recognized by major banks, asset managers, hedge funds, regulators, and central banks worldwide. Part 1 builds the quantitative and conceptual foundation for risk management practice.
The exam contains 100 equally weighted multiple-choice questions with a 4-hour time limit. It is offered twice per year in May and November. The pass rate is approximately 40–46%. GARP does not publish a specific passing score — results are reported as pass or fail with quartile performance by topic.
FRM Part 1 Topic Breakdown
| Topic | Weight | Key Areas |
|---|---|---|
| Foundations of Risk Management | 20% | Risk types, CAPM, Fama-French, risk governance, GARP code of conduct |
| Quantitative Analysis | 20% | Probability, distributions, regression, time series, Monte Carlo, copulas |
| Financial Markets and Products | 30% | Derivatives pricing, forwards/futures/swaps/options, fixed income, FX |
| Valuation and Risk Models | 30% | VaR (historical, parametric, MC), bond valuation, Greeks, stress testing |
Sample FRM Part 1 Questions
1. A portfolio has a daily VaR of $1,000,000 at the 99% confidence level. Assuming returns are normally distributed and i.i.d., the 10-day VaR at the 99% confidence level is closest to:
2. A bond has a modified duration of 7.5 and a convexity of 120. If interest rates increase by 100 basis points, the approximate percentage price change is closest to:
3. Which of the following best describes the difference between systematic risk and idiosyncratic risk?
Study Tips for the FRM Part 1 Exam
Financial Markets and Products and Valuation and Risk Models together account for 60% of the exam — master these first. For derivatives, know the pricing of forwards (cost-of-carry model), futures vs. forward differences, option Greeks (delta, gamma, vega, theta, rho), and the Black-Scholes formula applications. For VaR, understand all three methodologies (historical simulation, parametric/variance-covariance, Monte Carlo), their assumptions, and their limitations.
Quantitative Analysis is the foundation — candidates who struggle with probability distributions, regression, and hypothesis testing will find the other topics harder. Invest time here early. GARP publishes official study materials through its website; Schweser and Bionic Turtle are the most popular third-party prep providers. Aim for 200–250 hours of study spread over 4–6 months.
Comparing credentials? See the CFA Level 1 and CAIA Level 1 practice exams.
Frequently Asked Questions — FRM Part 1
What is the FRM designation?
The FRM (Financial Risk Manager) is a professional designation awarded by GARP (Global Association of Risk Professionals) to individuals who demonstrate expertise in financial risk management. It is the most widely recognized risk management credential globally and is held by professionals at major banks, hedge funds, regulators, and asset managers worldwide.
Ready to continue? After passing FRM Part 1, the next step is FRM Part 2, which applies Part 1 tools to real-world risk scenarios across market risk, credit risk, and operational risk.
What is the FRM Part 1 pass rate?
The FRM Part 1 pass rate is approximately 40–46%, varying by exam window. GARP does not publish exam-specific pass rates; estimates come from candidate surveys and historical GARP reports. The exam's quantitative demands make it challenging even for candidates with strong finance backgrounds.
How many hours should I study for FRM Part 1?
GARP recommends approximately 240 hours of study for Part 1. Most candidates complete preparation in 4–6 months. Candidates with strong quantitative backgrounds (engineering, math, physics) may need fewer hours; those without prior derivatives or statistics exposure should budget 250–300 hours.
How often is the FRM Part 1 exam offered?
FRM Part 1 is offered twice per year — in May and November. GARP has also been expanding exam windows, so check GARP's website for the most current schedule. Results are typically released 6–8 weeks after the exam date.
What is the difference between FRM Part 1 and Part 2?
Part 1 builds the quantitative and conceptual toolkit: risk theory, statistics, derivatives pricing, and valuation models. Part 2 applies those tools to real-world risk management across market risk, credit risk, operational risk, liquidity risk, and risk management in investment management. Part 2 also includes a Current Issues section that updates annually. Both parts must be passed within 4 years.
Do I need to pass Part 1 before taking Part 2?
You can sit for both FRM Part 1 and Part 2 on the same day (within the same exam window). However, you must pass Part 1 first — if you pass Part 2 but fail Part 1 in the same window, your Part 2 result is void and you must retake both. It is strongly advisable to pass Part 1 before attempting Part 2.
What jobs use the FRM designation?
The FRM is most valuable for professionals in market risk, credit risk, operational risk, and enterprise risk management at banks and financial institutions. Common roles include risk analyst, risk manager, chief risk officer, quantitative analyst, and regulatory specialist. The designation is widely recognized by banking regulators and is often listed as a preferred credential in risk management job postings.