exam outline - Exam FMAugust 2010 Financial Mathematics...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam FM— August 2010 Financial Mathematics Exam FM is a three-hour, multiple-choice examination that is administered by Preliminary Actuarial Examinations/SOA and is identical to CAS Exam 2. The examination is jointly sponsored and administered by the CAS, SOA, and the Canadian Institute of Actuaries (CIA). The examination is also jointly sponsored by the American Academy of Actuaries (AAA) and the Conference of Consulting Actuaries (CCA). Exam FM is administered as a computer-based test. For additional details, please refer to “Computer- Based Testing Rules and Procedures” ( http://www.beanactuary.org/exams/cbt.cfm ). The goal of the syllabus for this examination is to provide an understanding of the fundamental concepts of financial mathematics, and how those concepts are applied in calculating present and accumulated values for various streams of cash flows as a basis for future use in: reserving, valuation, pricing, asset/liability management, investment income, capital budgeting, and valuing contingent cash flows. The candidate will also be given an introduction to financial instruments, including derivatives, and the concept of no-arbitrage as it relates to financial mathematics. Exam FM assumes a basic knowledge of calculus and an introductory knowledge of probability. The following learning objectives are presented with the understanding that candidates are allowed to use specified calculators on the exam. The education and examination of candidates reflects that fact. In particular, such calculators eliminate the need for candidates to learn and be examined on certain mathematical methods of approximation. Please check the Updates section on the FM page of the SOA Web Site for any changes to the exam or syllabus. LEARNING OBJECTIVES I. Interest Theory A. Time Value of Money 1. The candidate will be able to define and recognize the definitions of the following terms: a. Interest rate (rate of interest) b. Simple interest c. Compound interest d. Accumulation function e. Future value f. Present value/net present value g. Discount factor h. Discount rate (rate of discount) i. Convertible m-thly j. Nominal rate k. Effective rate l. Force of interest m. Equation of value
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2. The candidate will be able to: a. Given any two of interest rate, present value, or future value, calculate the third based on simple or compound interest. b. Given any one of the effective interest rate, the nominal interest rate convertible m-thly, the effective discount rate, the nominal discount rate convertible m-thly, or the force of interest, calculate all of the other items. c. Write the equation of value given a set of cash flows and an interest rate. B.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 6

exam outline - Exam FMAugust 2010 Financial Mathematics...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online