PRM Subjects:- To meet with the needs of busy professionals, the program provides for great flexibility, offering four separate exams, varying in length from one to two hours, which can be taken in any order over a period of up to two years. Passing all four exams leads to the award of the PRM designation.
The program also recognizes the achievements of those who have other professional designations and gives partial credit towards completion of the requirements for the PRM designation. “Cross-over” candidates must pass the following exams: CFA Charterholder Exams III and IV PRMIA Associate PRM Exams I, II and III
Following table showcases the details of PRM exams:
|Exam||Exam Name||No. of Questions||Time Allowed|
|I||Finance Theory, Financial Instruments and Markets||36||2 hours|
|II||Mathematical Foundations of Risk Measurement||24||2 hours|
|III||Risk Management Practices||60||3 hours|
|IV||Case Studies, PRMIA Standards of Best Practice, Conduct and Ethics, Bylaws||24||1 hour|
PRM Subjects- Exam I
- Finance Theory – This section carries 36% weightage and you will study about the risk and its aversion, CAPM, Basics of capital structure, Valuation of forward contracts and Options Pricing.
- Financial Instruments – This section carries 36% weightage and hence you are required to have descriptive and pricing knowledge on the various financial instruments like Bonds, Futures and forwards, Swaps, Credit Derivatives etc.
- Financial Markets – This section carries 28% weightage, for this section you should have knowledge of Money, Bond, Forex, Stock, Futures, Commodities and Energy Markets.
PRM Subjects- Exam II
- Mathematical Foundation – This section carries 4% weightage and it deals with the mathematical symbols, rules, sequences, series, exponents and logarithmic concepts, various functions and graphs.
- Descriptive Statistics – This section carries 8% weightage and it includes the moments of a distribution, bivariate data, measures of dispersion.
- Calculus – This section carries 21% weightage and it includes differential calculus, integral calculus, applications of second derivatives, optimization etc.
- Linear Mathematics & Matrix Algebra – This section carries 21% weightage and it includes matrix algebra, its applications, and quadratic forms.
- Probability Theory – This section carries 25% weightage and it includes probability theory definitions and rules, distribution concepts.
- Financial Theory – This section carries 13% weightage and it includes the simple, multiple linear regression, hypothesis testing, maximum likelihood estimation.
- Numerical Methods – This section carries 8% weightage and it includes numerical methods for valuing options, solving equations etc.
PRM Subjects- Exam III
- Risk Management Frameworks – This section carries 11% weightage and it includes the knowledge on the area of risk governance, risk management frameworks etc.
- Operational Risk – This section carries 16% weightage and it includes risk assessment, risk information, risk modeling, insurance mitigation.
- Credit Risk – This section carries 29% weightage and it includes the knowledge on classic credit products, classic credit life cycle, classic credit risk methodology, credit derivatives and securitization, modern credit risk modeling and credit portfolio management.
- Counterparty Credit Risk – This section carries 8% weightage and it deals with the basics of counterparty risk, risk mitigation, credit valuation adjustment (CVA), CVA related aspects and managing counterparty risk.
- Market Risk – This section carries 23% weightage and it includes market risk governance, market risk measurement and management, market risk in trading book, commodities market risk management, market risk stress testing.
- Asset Liability Management, Liquidity Risk Management & Funds Transfer Pricing – This section carries 18% weightage and it includes interest rate risk, liquidity risk, Introduction to ALM, balance sheet management, Funds Transfer Pricing Governance, Management, Methods and Historical Development.
PRM Subjects- Exam IV
- Case Studies – This section carries 63% weightage and for this section you will required to study about the various cases like World Com, Barings, LTCM, NAB-FX Options, Bankers Trust, Washington Mutual, Northern Rock etc.
- Standards of Practice, Governance & Ethics – This section carries 37% weightage and this includes study on PRMIA Bylaws, Governance Principles, Standards of Best Practice, Conduct and Ethics, Group of Thirty Derivatives Best Practices.