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FRM Part II topic weights
6 topic areas, ranked by weight, with the modules, key terms and practice links for each.
The weights at a glance
80 equally weighted multiple-choice questions in four hours, by computer-based testing. Offered in May, August and November.
Weights are from GARP's 2026 Learning Objectives; GARP had not published 2027 learning objectives when this page was checked in October 2026.
What each topic covers
Ordered from the heaviest weight down. Module names follow the official outline.
Market Risk Measurement & Management
20% of the exam
VaR and ES estimation, backtesting, EVT, GARCH, copulas, FRTB.
- VaR estimation approaches and their limitations; backtesting VaR
- Expected Shortfall and other coherent measures; parametric and non-parametric estimation
- Extreme value theory and tail risk
- Volatility modelling: GARCH, EWMA, implied volatility surfaces
- Correlation and copulas
- Fixed-income and term-structure models; interest rate risk hedging
- Volatility smiles; exotic and mortgage-backed products
- Fundamental Review of the Trading Book (FRTB)
Topic map and sample questions. Key terms: Standard deviation · Correlation · Kurtosis · Monte Carlo simulation · Carry trade · Duration · all 25. Worked guides: Expected shortfall versus VaR · VaR and the square-root-of-time rule.
Credit Risk Measurement & Management
20% of the exam
Merton and reduced-form models, credit VaR, counterparty risk, CVA, CDOs.
- Credit analysis and the credit process; ratings and rating transitions
- Structural and reduced-form default models; Merton model
- Portfolio credit risk, default correlation and credit VaR
- Counterparty risk, CVA/DVA/FVA and wrong-way risk
- Netting, collateral and margining
- Credit derivatives and credit default swaps
- Securitisation, structured credit and CDOs
- Basel credit risk capital frameworks; stress testing credit portfolios
Topic map and sample questions. Key terms: Adverse selection · Interest coverage ratio · Credit spread · Securitisation · Tranche · Prepayment risk · all 18. Worked guides: Credit valuation adjustment (CVA): a worked example · Funding valuation adjustment (FVA).
Operational Risk & Resilience
20% of the exam
RCSA and loss data, model risk, cyber, third parties, financial crime, Basel.
- Operational risk taxonomy, RCSA and loss data collection
- Modelling operational risk loss distributions; capital approaches
- Risk governance, risk appetite and the three lines of defence
- Model risk management and validation
- Cyber risk and information security; third-party and outsourcing risk
- Business continuity and operational resilience
- Financial crime: money laundering, sanctions and fraud
- Basel operational risk framework; regulation and supervision
- Stress testing and enterprise risk management
Topic map and sample questions. Key terms: Operational risk · Rogue trading · Model risk. Worked guides: Barings, 1995 · Société Générale, 2008.
Liquidity & Treasury Risk
15% of the exam
Funding vs market liquidity, LVaR, transfer pricing, IRRBB, LCR and NSFR.
- Liquidity risk: funding vs market liquidity
- Liquidity-adjusted VaR and transaction cost measurement
- Cash flow modelling and liquidity stress testing
- Intraday, collateral and contingent liquidity management
- Deposit and wholesale funding structures; transfer pricing
- Balance sheet management; repo markets
- Interest rate risk in the banking book (IRRBB)
- LCR, NSFR and the Basel liquidity framework
- Contingency funding plans
Topic map and sample questions. Key terms: Initial and variation margin · Lock-up period · Illiquidity premium · Collateral · Funding liquidity risk · Market liquidity risk · all 11. Worked guides: Funding valuation adjustment (FVA) · The gilt LDI crisis, 2022.
Risk & Investment Management
15% of the exam
Factor theory, risk budgeting, attribution, hedge funds, illiquid assets.
- Factor theory and portfolio construction
- Risk budgeting and risk monitoring for investment portfolios
- Portfolio performance measurement and attribution
- Hedge fund strategies, structures and risks
- Illiquid assets and valuation of private holdings
- Risk-adjusted performance measures
- Portfolio VaR and risk decomposition
Topic map and sample questions. Key terms: Multifactor model · Factor investing · Arbitrage pricing theory · Risk budgeting · Marginal VaR · Performance attribution · all 10.
Current Issues in Financial Markets
10% of the exam
This cycle's readings — AI in finance, climate risk, digital assets, bank stress.
- A rotating set of readings, replaced substantially each year
- Artificial intelligence and machine learning in finance
- Climate and transition risk
- Digital assets and stablecoins
- Cyber and operational resilience
- Post-2023 banking-stress lessons
Topic map and sample questions. Key terms: Moral hazard · Stress testing · Model risk · Bank run · Basel Accords · Liquidity coverage ratio · all 12.
Plan around it
- FRM exam dates and registration deadlinesEvery window for the next year, with the deadlines that matter.
- Free finance calculatorsVaR scaling, duration and convexity, and swap valuation.
- Finance glossary268 CFA® and FRM® terms in plain English.
- CFA Level I topic weights for 2027
- CFA Level II topic weights for 2027
- CFA Level III topic weights for 2027
- FRM Part I topic weights
Checked 28 October 2026. CFA® and FRM® are registered trademarks of their respective owners; Groundlearn is not affiliated with CFA Institute or GARP. Always confirm the current outline with the exam body.
Study it in Cornerstone
Cornerstone follows these weights: snapshot cards and five-question sessions for every CFA® and FRM® topic area, with progress weighted the way the exam is. Free to start on Android, and offline.
About CornerstoneOr get a free practice question every day on the Cornerstone WhatsApp channel.