Fundamentals of probability, random variables (discrete and continuous), and common univariate/multivariate distributions.
Stationary and non-stationary series (AR, MA, ARMA models) and simulation techniques like Monte Carlo and bootstrapping.
is a foundational pillar of the FRM Part I curriculum, accounting for 20% of the exam . This book transitions from general risk theory to the mathematical toolkit used to identify and manage risk, starting with Chapter 1: Fundamentals of Probability . Guide to Quantitative Analysis (Book 2) 1. Core Subject Areas Page 1 FRM PART I BOOK 2: QUANTITATIVE ANALysis...
A "hot topic" for examiners, used to update prior probabilities as new information becomes available.
Simple and multiple linear regressions, diagnostics (addressing issues like multicollinearity and heteroskedasticity), and predictive performance. This book transitions from general risk theory to
Recent additions include Machine Learning (ML) methods such as neural networks, decision trees, and regularization (LASSO/Ridge). 2. Strategic Focus for Page 1 & Chapter 1
Mastering the calculation of conditional , unconditional , and joint probabilities using probability functions. 3. Study Tips for Success FRM Part 1 - Book 2 - Quantitative Analysis - Udemy Simple and multiple linear regressions
The curriculum typically spans 13 to 15 readings, building from basic statistics to advanced predictive modeling: