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Exam FM Study Tips

This guide provides a comprehensive overview on how to study for Exam FM using The Actuarial Nexus.

Learning the Material​

The Actuarial Nexus offers a written course that covers the Exam FM syllabus. It provides a high-level overview of the topics and concepts tested on the exam.

For Exam FM, spending just enough time to understand the building blocks and immediately moving on to practice questions is widely considered an effective strategy. The key to success on Exam FM is practice, practice, practice.

A chapter-by-chapter breakdown of time spent on the course can be found here, with the average user spending less than five hours on the entire course. Note that this number is likely skewed low, due to some users only viewing the free chapters or supplementing learning with other resources. In contrast with the time spent on practice problems, the time spent on the course is at least an order of magnitude lower.

Flashcards are also available for each chapter, which can be used to reinforce key concepts. Flashcards is currently in beta, with more features planned in the future.

Practice Problems​

To get the most out of the platform, candidates should spend the majority of the time on practice problems, as this is where active learning and targeted learning occurs. The written solutions to practice problems provide a deeper explanation of the nuances tested on the exam.

Learning Objectives 1 through 4 build on each other. Unlike Exam P, it is more difficult to skip around on Exam FM. This increases the barrier to entry for diving into practice problems right away, but it is still recommended to start practice problems as soon as possible.

There are several ways to approach practice problems:

  • Linked Syllabus allows for a structured approach to solving questions by following the syllabus topic by topic. This is the recommended option for starting off.
  • Quick Start can provide a random selection of questions by difficulty. This is an alternative to the Linked Syllabus for those who prefer a more randomized approach.
  • By Topic and Spaced Repetition allow candidates to hone in on specific topics and weaknesses as more questions are answered.
  • There are other options as well, which are explained in greater detail in the Problem Sets section.

Using AI​

AI performs more poorly on Exam FM than Exam P, especially when the question involves specialized knowledge within the actuarial profession. This is likely because the base models have not been trained on these topics.

Additionally, the models may struggle with the notation used on Exam FM, as one letter or symbol can change the meaning of an entire equation.

These limitations can be mitigated with proper prompting and guidance, such as providing strict instructions on notation definitions in the initial prompt. This page provides more detail on using AI.

Monitoring Progress​

Exam FM is the second longest-standing exam offered by the SOA, after Exam P. The pass rate and pass mark have also been consistent for many sittings. This makes gauging readiness for the exam both quantifiable and predictable.

Examples of metrics/tools that can be used to track progress include:

  • Accuracy measures the percentage of questions answered correctly. The pass mark for Exam FM is typically around 70%.
  • First Attempt Accuracy measures the percentage of questions answered correctly on the first attempt. This is a good indicator of applying learned concepts to new problems.
  • Solve Time tracks the time spent on each question. The exam allows for 6 minutes per question.
  • Mock Exams provide a realistic simulation of the exam environment and help assess readiness. Past users have reported that the actual exam felt comparable to a difficulty 6-7 mock exam.
  • User Level summarizes your overall performance on the platform. It is based on a combination of accuracy, difficulty of questions answered, time spent on the platform, and other factors.
  • Leaderboard gives a sense of where you stand relative to other users.

There are several dashboards available, which are outlined in more detail in the Analytics section.

Addressing Weaknesses​

The exam will test the candidate's understanding from each of the 5 Learning Objectives:

  1. Time Value of Money
  2. Annuities
  3. Loans
  4. Bonds
  5. General Cash Flows, Portfolios, and Asset Liability Management

Since the exam includes questions from each Learning Objective, it is important to ensure proficiency in all areas. Candidates taking exams with instant results will receive a Score Report that breaks down performance by Learning Objective.

It is much easier to address weak areas when they are identified through targeted metrics. The options below can be used to identify specific weaknesses.

Option 1: By Topic​

Problem Sets By Topic can be used to identify weak areas based on a metric and topic combination, such as relatively slow solve time for Annuity questions.

Example 1

  • Observation: You sort by "Relative Time" (from the Completion Table) and notice that your relative solve time in "Annuities" is 2x the average.
  • Action: Focus on "Annuities" since it is a relative weak area in terms of time management.

Example 2

  • Observation: You sort by "Accuracy (You)" (from the Accuracy Table) and notice that your accuracy is 90% in "Loans" is 90% and 50% in "Bonds."
  • Action: Focus on "Bonds" since it is a relative weak area in terms of accuracy.

After identifying a topic, questions can be directly added to your problem set from the same page.

Option 2: Spaced Repetition​

Spaced Repetition can be used to review questions that were answered incorrectly in the past at increasing intervals of time. The system automatically tracks your progress and adjusts the review schedule based on your performance. This ensures that questions that were previously answered incorrectly are revisited later.

The number and spacing of intervals can be customized as needed. Learn more about spaced repetition here.

Option 3: Pass Prediction​

Pass Prediction is a feature that estimates your likelihood of passing the exam based on your relative performance compared to others. This feature can help you identify areas where you need to improve relatively.

Read more about Pass Prediction and why relative performance can be an alternative indicator of exam readiness here.

Getting Help​

There are several ways to get help on the platform:

  • Channels can be used to discuss general topics, create study groups, or ask questions about the platform.
  • The AI Tutor should be the first line of defense for questions on specific problems.
  • Discussion forums are also available for each question and course chapter if the AI Tutor is unable to provide a satisfactory answer.

Off platform, the Actuarial Science subreddit and the Actuarial Exam Study Group Discord server have active communities that can provide additional support.

Mock Exams​

The final stage of preparation involves assessing readiness through timed mock exams. Mock exams are designed to simulate the actual testing conditions, and help evaluate performance under pressure.

The difficulty level of mock exams can be adjusted, so candidates can progressively increase the difficulty as they become more comfortable with the material. Past users have reported that the actual exam questions felt comparable to a difficulty 6-7.

When creating mock exams, candidates also have the option to "Exclude My Solved Questions", which removes all questions that have been previously answered correctly from the mock exam.

Although mock exams are a good measure of holistic readiness, they may serve better as a diagnostic tool than a learning tool. Practice problems may be more effective for addressing specific weaknesses during earlier stages of studying.

Learn more about mock exams here.

Summary​

Each candidate's study plan will vary based on their familiarity with the material and study habits. The general guideline we recommend is:

  1. Learn the Material: Spend just enough time to understand the building blocks and move on to practice questions as soon as possible.
  2. Practice Problems: Spend the majority of the time on practice problems. The written solutions provide a deeper understanding of the nuances tested on the exam.
  3. Analyze and Review: Review incorrect answers, track progress with analytics, and reattempt missed questions.
  4. Mock Exams: Take mock exams to simulate exam conditions, practice endurance, and assess overall readiness.

Pass Protection​

For candidates who want to ensure a pass, the platform offers a Pass Protection Program for Exam FM.

The program includes a promise of passing the exam if you meet at least 7 of 8 objective goals. If you meet these goals and still do not pass, you will be eligible for a full refund and lifetime access to the exam you purchased.

Students should expect to budget approximately 150 to 200 study hours to complete the program, with actual times varying based on individual study habits and prior knowledge.