What topics does Exam FM cover?

Exam FM covers time value of money, annuities, loans and amortization, bonds, general cash flows and portfolios (duration, convexity, immunization), and financial derivatives (forwards, futures, options, swaps).

What calculator is allowed on Exam FM?

The SOA permits the Texas Instruments BA-II Plus and the Casio ClassPad series. The BA II Plus is the most commonly used, and mastering its TVM and amortization functions is essential.

What is the Exam FM pass rate?

The SOA Exam FM pass rate is approximately 50%, based on historical data published by the Society of Actuaries.

How much does Exam FM cost?

The registration fee for Exam FM is approximately $250 (SOA). Study materials can be obtained for free through resources like FreeFellow.

What Is SOA Exam FM?: Financial Mathematics Exam Overview

Q: What format is Exam FM?

SOA Exam FM is a 3-hour, 30-question multiple-choice computer-based exam administered at Prometric testing centers.

What Is SOA Exam FM?

SOA Exam FM (Financial Mathematics) is a 3-hour, 30-question multiple-choice computer-based exam administered by the Society of Actuaries (SOA). It tests financial mathematics concepts including time value of money, annuities, bonds, loans, and financial derivatives. Exam FM has a historical pass rate of approximately 50% (SOA).

Exam FM was the second exam I took on my FSA path and one of my favorites. The math is elegant and practical. Time value of money, annuity pricing, bond valuation, and derivatives all connect to real-world financial instruments. Once you see the underlying structure, the problems become satisfying to solve.

Quick Facts

| Detail | Info |
|--------|------|
| Governing Body | Society of Actuaries (SOA) |
| Exam Format | Computer-based, multiple choice (5 choices) |
| Number of Questions | 30 |
| Duration | 3 hours |
| Pass Rate | Approximately 50% (SOA) |
| Registration Fee | Approximately $250 (SOA) |
| Calculator | TI BA-II Plus or Casio ClassPad |
| Next Exam Window | Offered via computer-based testing year-round |

Who Takes This Exam?

Exam FM is typically the second preliminary exam actuarial candidates take, after Exam P. Most candidates are college students or early-career professionals who have already passed Exam P and are building their exam credentials for employment.

The financial mathematics material is also relevant to finance professionals outside the actuarial field. The exam covers core concepts (time value of money, bond pricing, derivatives) that appear in investment banking, corporate finance, and fixed income analysis. However, the vast majority of candidates are on the actuarial career path.

Like Exam P, there are no formal prerequisites. Anyone can register and sit for Exam FM regardless of educational background, though a solid foundation in calculus is strongly recommended.

Exam Structure and Format

Exam FM covers six main topic areas (SOA):

Time Value of Money (30 to 35%) - simple and compound interest, force of interest, discount rates, equations of value. This is the foundation for everything else on the exam.
Annuities (20 to 25%) - annuity-immediate, annuity-due, deferred annuities, perpetuities, increasing and decreasing annuities, non-level payment streams.
Loans and Amortization (15 to 20%) - amortization schedules, sinking funds, outstanding balance (prospective and retrospective methods), refinancing.
Bonds (15 to 20%) - bond pricing, amortization of premium and discount, callable bonds, yield measures.
General Cash Flows and Portfolios (5 to 10%) - NPV, IRR, dollar-weighted and time-weighted returns, duration, convexity, immunization.
Derivatives (5 to 10%) - forwards, futures, put-call parity, basic options strategies, interest rate swaps.

All questions are calculation-intensive. Unlike Exam P (which emphasizes problem setup), Exam FM rewards candidates who can execute calculations quickly and accurately with their financial calculator.

Pass Rates

The SOA publishes pass rates after each sitting. Historical Exam FM pass rates have been approximately 50% (SOA), slightly higher than Exam P's 45%.

The higher pass rate partly reflects the nature of the material. Exam FM topics are more procedural than Exam P's probability theory. Candidates who master the calculator functions and standard problem types can achieve consistent accuracy. The challenge is speed, since 30 questions in 3 hours (6 minutes each) leaves little room for fumbling.

How to Prepare

The SOA recommends 250 to 300 hours of study for Exam FM (SOA). A typical study timeline is 10 to 14 weeks at 2 to 3 hours per day.

Mastering the BA II Plus calculator is essential and should start early. Spend 5 to 10 hours in your first week practicing TVM keys, the amortization worksheet, cash flow functions, and the bond worksheet. On exam day, calculator fluency saves critical minutes.

Candidates who pass typically complete 800 to 1,200 practice problems before exam day, focusing on building speed and recognizing standard problem patterns.

FreeFellow offers 1,000 free Exam FM practice questions with adaptive difficulty, detailed solutions, full practice exams, and performance analytics by topic.

Cost and Registration

Exam FM registration costs approximately $250 (SOA). The exam is administered year-round at Prometric testing centers via computer-based testing. Candidates register through the SOA website.

There are no eligibility requirements. No degree, no coursework prerequisites, no work experience. Anyone can register. Most candidates take Exam FM after passing Exam P, but the exams can be taken in any order.

Free Practice Resources

FreeFellow provides 1,000 free Exam FM practice questions with detailed solutions, three difficulty levels, adaptive practice targeting your weakest areas, and readiness scoring. Start your Exam FM preparation today.