Simple and multiple linear regressions, diagnostics (addressing issues like multicollinearity and heteroskedasticity), and predictive performance.
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 Page 1 FRM PART I BOOK 2: QUANTITATIVE ANALysis...
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 Strategic Focus for Page 1 & Chapter 1
Fundamentals of probability, random variables (discrete and continuous), and common univariate/multivariate distributions. Core Subject Areas Fundamentals of probability
As you begin with the first reading ( Fundamentals of Probability ), prioritize these high-yield concepts that GARP frequently tests:
Stationary and non-stationary series (AR, MA, ARMA models) and simulation techniques like Monte Carlo and bootstrapping.