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Risk Management
FRM Part II Risk Management and Investment Management Exam Preparation
Study factor theory, alpha, portfolio construction, VaR and risk budgeting, performance evaluation, hedge funds, manager due diligence and investment fraud indicators.
80 Unique Questions · 5 Mocks × 20 Detailed Study Notes Timed topic practice
Course syllabus information reviewed for 2026. Always check the awarding body’s latest official syllabus and candidate updates before booking or sitting your exam. Exams Academy is an independent education provider and is not affiliated with GARP.
Exactly what is included
- 5 mock exams × 20 questions · 80 unique questions · 100 total question slots · unlimited retakes
- Focus Learn · key areas, pitfalls, exam traps & key numbers
- Flashcards · fun, fast and effective recall
- Exam cheat sheet · key facts, rules and numbers by chapter
- Audio Learning · every chapter in audio
- AI Analyzer & Mentor · pinpoints your weak areas
- Study Mode Exams · learn while you train
- AI Chat trained specifically for this exam
- Community-polished data, improved every day
- Up-to-date, accuracy-checked content
AI Audio Summaries New
Listen to course modules on the go. Perfect for studying while driving or commuting.
🎧 Audio
* This is a chapter sample. All audio is available in the full version.
Syllabus
Module 1: Factor Theory
🎧 Audio
CAPM, multifactor models, stochastic discount factors and market efficiency.
Module 2: Factors
Value, macro, size, momentum and dynamic factor exposures.
Module 3: Alpha (and the Low-Risk Anomaly)
Benchmarks, regressions, nonlinear payoffs and low-risk anomalies.
Module 4: Portfolio Construction
Alpha processing, costs, optimization and dispersion.
Module 5: Portfolio Risk: Analytical Methods
Portfolio, marginal, incremental and component VaR.
Module 6: VaR and Risk Budgeting in Investment Management
Absolute and relative risk, guidelines and risk allocation.
Module 7: Risk Monitoring and Performance Measurement
Risk plans, budgets, monitoring, attribution and ratios.
Module 8: Portfolio Performance Evaluation
Return conventions, risk adjustment, timing and attribution.
Module 9: Hedge Funds
Business models, styles, factor exposures, tail risk and fees.
Module 10: Performing Due Diligence on Specific Managers and Funds
Investment, risk, operational, service-provider and fraud review.
Module 11: Predicting Fraud by Investment Managers
Regulatory data, prediction models and implementation limits.
Interactive preview
Free GARP FRM Part II - Risk Management and Investment Management (Book 5) Practice Questions & Exam Preview
Try 15 GARP FRM Part II - Risk Management and Investment Management (Book 5) practice questions from Factors, Portfolio Risk and Manager Due Diligence
Practice GARP FRM Part II - Risk Management and Investment Management (Book 5) exam questions with answers and explanations. The full course includes 5 mock exams and complete syllabus coverage.
Exam Preview
Factors, Portfolio Risk and Manager Due Diligence
Which statement correctly explains Factor risk premium?
1 / 15
Flashcards
Card 1 of 10Chapter 1
Question
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Focus Learn
- Factor risk premium
- CAPM factor
- Beta
- Security market line
- Diversification
- Multifactor model
- Stochastic discount factor
- Pricing kernel
- CAPM failure
- Market efficiency
Chapter 1: Factor Theory
Direct answer
This chapter explains Factor Theory within the supplied FRM Part II investment-management book. The recurring exam method is to define the investor objective, select the correct benchmark and risk model, identify factor and liquidity exposures, and decide whether the reported return is compensation for systematic risk, genuine skill or a measurement artifact.
Source-grounded recall
- Factor risk premium: Compensation for bearing losses in states investors regard as bad times.
- CAPM factor: The market excess return is the single CAPM factor.
- Beta: Covariance with the market divided by market variance measures market-factor exposure.
- Security market line: Expected excess return is proportional to beta under CAPM.
- Diversification: Idiosync…
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Preparation Package at a Glance
| Feature | Exams Academy | Details |
|---|---|---|
| Access Period | Lifetime Access | One-time enrollment with no recurring fee |
| Practice Exams | Unlimited Retakes | Five 20-question timed book-level mock exams |
| Study Support | Instant 24/7 AI Tutor | Self-service AI support; live instructor support is not included |
| Cost | $71 (One-Time) | One-time payment with no recurring subscription |
Preview & See What You Will Get
Frequently Asked Questions
No. It covers the Risk Management and Investment Management printed book. Candidates also need the other Part II books and Current Issues readings.
GARP describes Part II as 80 equally weighted multiple-choice questions completed in four hours across all domains.
No. They are book-level topical practice at the official average pace.
No. GARP does not publish a fixed percentage pass mark; 70% is an internal mastery target.
No. Exams Academy is an independent education provider and is not affiliated with or endorsed by GARP.
You receive lifetime access with no recurring subscription fee.
Yes! Test your knowledge and review detailed explanations with the free GARP FRM Part II - Risk Management and Investment Management (Book 5) Mock Exam Preview below. It contains 15 exam-style questions from one named topic; the full course provides complete mock exams and syllabus coverage.
Key Benefits
Five Timed Book-Level Mock Exams
Test all 11 chapters through five 20-question papers at the official Part II pace.
- ✓ 80 distinct questions across Mocks 1-4.
- ✓ Mock 5 samples five questions from each earlier paper.
- ✓ Source-grounded explanations for every answer.
Investment Risk AI Tutor
Clarify factors, alpha, portfolio risk, performance and manager due diligence.
- ✓ Compare CAPM and multifactor models.
- ✓ Review VaR contribution and risk budgets.
- ✓ Work through hedge-fund and fraud-risk evidence.
Active-Recall Revision
Strengthen memory with 130 flashcards and a 142-item reference sheet.
- ✓ Ten cards per chapter.
- ✓ Twenty number-recall cards.
- ✓ Specific close distinctions and exam traps.
Detailed Chapter Summaries
Connect returns with factors, benchmarks, risk, cost and verified manager evidence.
- ✓ Factor theory, alpha and construction.
- ✓ Risk budgeting and performance evaluation.
- ✓ Hedge funds, due diligence and fraud indicators.
Exam Format & Details
| Assessment | Book-level topical practice: 20 multiple-choice questions in 60 minutes. The official FRM Part II exam covers all Part II domains with 80 equally weighted questions in four hours. |
| Duration | 60 Minutes |
Focused preparation for FRM Part II Book 5
Risk Management and Investment Management moves from factor theory, factor premiums and alpha into portfolio construction, analytical risk, VaR-based risk budgeting, monitoring, performance evaluation, hedge funds, manager due diligence and fraud indicators.
This course keeps all 11 chapters together as one source-grounded learning hub with 130 flashcards, a 142-item reference sheet, detailed summaries, five timed mocks and a grounded AI tutor.
The official FRM Part II exam contains 80 equally weighted multiple-choice questions across all Part II domains and lasts four hours. These 20-question papers preserve the average pace but are book-level topical practice. The 70% result is an internal mastery target, not an official GARP pass mark.
Who Is This For?
✓ Candidates preparing for the GARP FRM Part II examination
✓ Portfolio-risk, asset-management, performance and manager-research analysts
✓ Candidates completing each official Part II book separately
✓ Professionals strengthening factor, risk-budgeting and due-diligence skills
Preparation centre
GARP FRM Part II - Risk Management and Investment Management (Book 5) Exam Guides
Use these connected guides for the syllabus, exam format, booking and revision strategy.
Ready to Pass Your Exam?
Master this FRM curriculum book with source-grounded summaries, active recall and clearly scoped book-level practice before combining it with the rest of the curriculum.
GARP FRM Part II - Risk Management and Investment Management (Book 5)
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