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PRMIA :: Exam Overview
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The PRMIA Certified Risk Manager exam has been designed, from the ground-up to both
reflect the mission objectives of the association as well as to establish the program as the
leading form of certification in the Risk Management profession.
Because we are a diverse association, with members from more than 70 different
countries, from a variety of disciplines and varying areas of interest, it is a particular
challenge to create an exam that truly reflects our association. The members of the
Education and Certification Committee have taken the job of creating the framework to
help us meet both the demands of current members as well as developing the flexibility to
grow and change together with our industry.
Specifically, the exam has been designed with four of our Mission objectives in mind:
- To be a leader of industry opinion and a proponent for the risk management
profession.
By setting the standard of certification for the risk management profession, we
begin to develop standards of practice and accountability that will define what
PRMIA Certified Risk Managers represent to their colleagues and employers.
- To drive the integration of practice and theory.
Neither theory nor practice will successfully develop to their potential without a
strong interaction between professionals in each area. The PRMIA Certified Risk
Manager exam contains subject matter drawn from risk management,
mathematical and financial theory as well as applied question matter from the
practices of our profession. We will directly test for knowledge of basic Math
(Calculus, Linear Algebra and Probability) and Finance (Portfolio Theory, Asset
Pricing Theory, Option Theory). Such knowledge is essential for risk managers.
We will also test for practical knowledge about markets: trading practices,
intermediaries, settlement and other conventions in specific markets. These
market choices will reflect the most global of markets as well as some more
narrowly defined markets, with the latter giving us the opportunity to expose
people to markets in which they may not normally be active.
- To be global in our focus, promoting cross-cultural ethical standards, serving
emerging as well as more developed markets.
Nearly 70% of the content of the PRMIA Certified Risk Manager exam is
designed to be geographically neutral. Specific sections focusing on "markets" are
designed so that a variety of markets and market lessons will be studied.
The PRMIA Code of Conduct represents the first step in developing the
professional standards of behavior that PRMIA Certified Risk Managers present
Guide to the PRMIA Certified Risk Manager Exam 2
to their colleagues and employers. All PRMIA Certified Risk Managers will be
required to study the Code for the exam.
- Transparent, nonprofit, independent, member-focused and member-driven.
A unique feature of our program is that through a simple form on the PRMIA web
site, any PRMIA member can submit questions for possible inclusion on the
exam. Those submissions go through a quality control screening by a number of
members of the Education and Certification Committee and, if approved, will
make it to our exam question database. By emphasizing peer input, this approach
sets a standard of measurement created by the association as a whole.
Candidates will study the Bylaws of PRMIA, so that they are familiar with our
structure and codification of member-leadership.
Finally, to test for broad understanding of important risk management lessons, we have
included a section based on the time-tested case-study approach to learning. Narratives of
historical incidents where critical risk management issues have arisen give us the
opportunity to conduct a sort of pathology of events from around the globe and to test
members’ understanding of their root causes.
The subject matter for the PRMIA Certified Risk Manager exam was chosen based on
relevance as well as the ready availability of literature on the specific subjects. There is a
reference section in this document, together with, in keeping with our mission, an
interactive links section on the PRMIA web site that allows members to list and rate the
usefulness of these and other resources.
The learning objectives for certification are to demonstrate:
- knowledge of basic Linear Algebra, Calculus and Probability Theory
- knowledge of classic Finance theory
- knowledge of the foundation of option theory
- knowledge of financial instruments and their associated risks
- an understanding of the daily form and function of trading markets
- an understanding of risk practices
- an understanding of failed systems and practices from major risk events
- knowledge of the PRMIA Code of Conduct
- knowledge of PRMIA's Bylaws
The exam will be six hours in length, five hours of testing with a one-hour break during
the exam. Be sure to read this entire document to view details on the pass-rate
methodology and other important information that will help you to be a successful
candidate. We hope that you will join us in promoting the PRMIA Certified Risk
Manager exam as the standard for our industry and that you will join in our efforts to
ensure that it will continue to meet the needs of our members and our industry.
The subject matter of the exam is broken down broadly as:
- Mathematics (20%)
- Finance (25%)
- Financial Risk Management Practices (30%)
- Case Studies / PRMIA Bylaws and Code of Conduct (25%)
A more detailed outline is provided later in this guide.
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