Exams – Study Tips and Information

One of the most prominent “features” of the actuarial career is the exams.  Most if not all companies expect to see you pass or at least take 1 exam for an internship, and 2 to 3 for a full-time entry-level position.

Study tips:

  • Each exam requires a lot of time and effort.  The rule of thumb is 100 hours of studying per hour of the exam; the exams themselves are usually 3 or 3.5 hours.
  • Being self-motivated is key.  Get your study materials well ahead of the exam sitting period (at least 3 months) and set apart time to study each day.  Blocking off certain periods of time in your schedule can be useful. Make sure to utilize the Johnson fund to fund your study materials and cost of exam if you qualify. 
  • Ian says… “Based on my experience with Exams P and FM, it’s best to set aside a month (or even a month and a half) before the exam to focus exclusively on practice problems and exams.  Prior to that, taking at least 2.5 to 3 months for learning the material is best; 2 months is certainly possible, but it might feel a bit crammed-in (particularly if you’re trying to study during the semester).”
  • There are many different types of study materials, and ultimately, you have to decide which one works best for you.  Here are some helpful resources and links for each of the main types:
  • Lastly, be sure you bring a calculator approved for use by SOA or CAS! Use these calculators when studying to get a good feel for them.
    • For Exam P (and all the preliminary exams), the TI-30XS has a wide range of useful capabilities
    • For Exam FM, use TI-BA II Plus (Professional version is optional) for time value of money, bonds, and other cash flow problems

Exam Information (Dates, Topics Covered, Etc.)

  • Exam P – Probability
    • Sets and Events (Independence, Intersection, Union)
    • Combinatorial and conditional probability (including Bayes Theorem)
    • Random Variables – properties, functions, and transformations of the following distributions:
      • Binomial, Negative Binomial, Geometric, Hypergeometric, Poisson, Uniform, Exponential, Gamma, Normal, and Mixed
    • Joint probability functions, joint distribution functions, joint moment generating functions, and transformations of joint distributions
    • Conditional and Marginal probability distributions
    • Central Limit Theorem
    • Covariance and correlation coefficients
    • Order statistics
    • Offered in January, March, May, July, September, and November
  • Exam FM – Financial Mathematics
    • “The goal of this syllabus is to provide an understanding of the fundamental concepts of financial mathematics, and how those concepts are applied in calculating present/accumulated values for various streams of cash flows, as a basis for future topics.”
    • Assumes a basic knowledge of calculus and an introductory knowledge of probability
    • Time value of money – interest rates, accumulating money to a future date (or discounting a future cash flow to the present)
    • Annuities; cash flows with payments (regular, or increasing/decreasing) at regular intervals; perpetuities, arithmetic/geometric progression
    • Loans – principal, interest, term (length) of loan, outstanding balance, final payment, amortization, sinking fund; calculations of these items, outstanding balance at any point in time, interest/principal in a given payment, etc.
    • Bonds – define and recognize book value, redemption value, face/par value, yield and coupon rates; given partial information, being able to calculate the remaining information for the bond (length of term, book value at a given, etc.)
    • General Cash Flows and Portfolios – recognizing and calculating dollar/time-weighted rates of return; calculating convexity and duration (Macaulay and Modified) of a set of cash flows; using duration to approximate the change in present value due to a change in interest rate; etc.
    • Immunization – define and recognize different types of immunization (protection against risk); construct cash flows to immunize a portfolio, or match another set of cash flows
    • Interest Rate Swaps
    • Determinants of Interest Rates
    • Offered in February, April, June, August, October, and December
  • More detailed explanation of differences between SOA/CAS exam paths:

How to Register:

Refer to the SOA website for Exam Schedules | SOA.  When you’re ready to register, click on this link to select the exam you wish to take (CBT means computer-based testing) and begin registering.  If you have not already done so, you will need to create an SOA account; from there, just follow the on-screen instructions.  Don’t forget to click on “Lookup Exam Center!” (CBT USA if you plan on taking it in the US)

Once you complete the order, you will receive an email receipt.  A few days later, you will receive an email with a candidate reference number and instructions for scheduling your exam.  Go to this link and follow the instructions (using your candidate number as the eligibility ID, and the first four letters of your last name) to locate and choose a testing center, date, and time.

Please note that exams are non-refundable!!!  You can switch to a different testing center or date/time within the same sitting period, but if you wait until 30 days before the exam, you will have to pay a $50 fee.  Exams cannot be rescheduled or relocated within two business days of the originally scheduled date.  (Click here for more info.)