Failed Actuarial Exam FM (Financial Mathematics)? Here's Your Recovery Plan

Pro tip: Use Coaching Actuaries ADAPT, raise your earned level to 7+ before sitting.

• Studying derivatives material because an older manual or an older released exam paper includes forwards, futures, options and swaps.
  The current FM syllabus contains five topics and none of them is derivatives. Check every practice question against the five published learning objectives and discard anything about option payoffs or swap pricing.
• Leaving hard questions blank when time runs out.
  The SOA syllabus states that all unanswered questions are scored incorrect and advises candidates to answer every question. There is also no fixed distribution of correct answers, so a letter could appear many times or not at all. Fill every blank before the clock stops.
• Buying a TI-30Xa or BA-35 because it is on the approved list and cheaper.
  The SOA syllabus says there may be examination problems that require the BA II Plus or BA II Plus Professional in order to find the answer, because those models solve for interest rates. Use one of those two as your primary calculator.
• Leaving P/Y and C/Y at the BA II Plus factory default of 12 and getting annuity answers that are close but wrong.
  Set P/Y and C/Y to 1 and clear the TVM registers between every problem. Build the reset keystroke into your practice routine so you do it without thinking on exam day.
• Treating Macaulay duration and modified duration as interchangeable in the approximation formulas.
  The syllabus lists two separate first-order approximations, one built on modified duration and one built on Macaulay duration. Learn both, and learn which one a question is asking for from the wording of the stem.
• Assuming Redington immunization and full immunization are the same construction.
  Redington protects against small rate changes and requires asset convexity to exceed liability convexity at the current rate. Full immunization requires liability cash flows to be bracketed by asset cash flows and holds for a rate change of any size. Practise them as separate problem types.
• Skipping the required study note FM-24-17 because it is short.
  Sections 1 to 4 of FM-24-17 are named as required reading on the syllabus, and the duration and convexity topic carries a 20 to 30 percent weight range. Read it and work the examples.
• Practising untimed, then discovering on exam day that 30 questions in 150 minutes leaves five minutes each.
  Drill full 30-question papers at 150 minutes from week seven onward. Set a personal two-minute rule: if you have not found the route to the answer in two minutes, flag it and move on.
• Chasing an exact match with an answer choice and re-doing a correct calculation.
  The syllabus states that answers for some questions have been rounded. If your figure sits very close to one choice and far from the others, select it and move on rather than spending two more minutes hunting a phantom error.

• Covers time value of money, annuities and bonds
• 30 multiple-choice questions in 3 hours
• Coaching Actuaries ADAPT is the gold standard for practice
• Master financial calculator (BA II Plus), speed is critical
• Study 250-350 hours; harder than Exam P for most candidates
• Passing P + FM before graduation makes you highly recruitable