How to Prepare for PRM Exam – Part I
This post is for students who are preparing for or planning to write the PRM exam.
Professional Risk Manger (PRM) Exam has become quite popular among the risk professionals and students and competes head-on with the respectable Financial Risk Manager (FRM) Exam from GARP. Even though both the exams certify you as risk managers, the exams are quite different.
In this article, we will discuss in details about what PRM exam is all about and how to go about preparing for it.
PRM takes a holistic approach to the fieldof risk management and tests the students on all aspects of risk management. For this purpose, the complete PRM exam is divided into four exams. Candidates are required to pass four exams to achieve the PRM Designation:
- Exam I: Finance Theory, Financial Instruments and Markets
- Exam II: Mathematical Foundations of Risk Measurement
- Exam III: Risk Management Practices
- Exam IV: Case Studies, PRMIA Standards of Best Practice, Conduct and Ethics, Bylaws
The exams are computer-based, conducted at Pearson Vue testing centers. So, you can sign up to write the exam at any Pearson Vue center nearest to your location.
General Tips for Preparing
Let us first look at some general tips that are relevant for all the four exams. After that we will delve into specific subject matter related tips for each of the four exams.
Focus of the exam
The focus of the exam is to check your real understanding of the subject, rather then to check your memory power. Most of the questions in the exams are targeted at checking your conceptual understanding of the subject. Sometimes the questions may appear very simple, but they will really be checking your true knowledge. Of course, it is important to remember some important formulas, but more important than that is to get your basics right.
The study material
PRM publishes the PRM Handbook, which is the official reading material for the PRM exam. Apart from that there are many training providers, who provide PRM coaching.
The best way to prepare is to stick to one set of references to prepare for the exam, rather than diving into study materials from various providers.
For a diligent student, PRM handbook is the best resource to prepare for the exam. If you are preparing with the PRM Handbook, then you can also refer to other books such as Hull, Jorion or Fabozzi to understand any particular topic that you want more clarification on. However, for the most part, the PRM handbook is enough.
