All About PRM Exam III

We have already talked about the PRM Exam I and PRM Exam II. In PRM Exam I, the focus was to build the foundation of finance theory, financial instruments, and financial markets. In PRM Exam II, the focus was on building the mathematical foundations of risk measurement.

PRM Exam III is at the heart of the PRM certification, and this is where your knowledge of risk management practices is tested. The exam curriculum revolves around the three major categories of risks, namely, credit risk, market risk, and operational risk.

Exam Format

The PRM Level III exam is a multiple-choice exam. There are total 36 questions to be answered in 1.5 hours time. The questions will be both concept and number based.

PRM Exam III Waiver

PRM Exam is an essential exam and there are no waivers for Exam III even if you have any other financial certification.

PRM Exam III Curriculum

The PRM Exam III curriculum focuses on the following topics:

Topic	Weight	No. of Questions
Market Risk	33%	12
Credit Risk	33%	12
Operational Risk	33%	12

All the three sections are given equal weight. As you go through the exam syllabus, you will understand the different kinds of risk faced by bankers, fund managers and corporate treasurers, and how these risks are calculated and managed by the risk managers. Let’s look at each section in more detail.

Market Risk: This section focuses on the concept of market risk, market risk management framework, value-at risk models to quantify market risk, and other advanced concepts such as risk decomposition. You will also learn about stress testing, model risk, and liquidity risk management.

Credit Risk: This section discusses the concept of credit risk, tools and techniques for managing credit risk, credit risk modeling, and calculation of credit risk capital.