As all good (aspiring) actuaries do I will start this article with a few assumptions. First, I assume you have some familiarity with the actuarial exam process (check out my previous article if needed). I’m also going to assume that you are writing one of the Computer-Based Testing (CBT) Exams – likely Exam P or Exam FM. Here are a few tips I’ve compiled that have helped me succeed with the “prelim” SOA/CAS exams.
1. Start Early
If I wanted to make this article even more click-baity than it already was, I would list this as Step 0. Underestimating the time commitment it takes to write these exams is the number one trap I see people falling into. I would equate the time spent on a prelim exam approximately to an upper year university math course – something that you can’t (or shouldn’t) study for in a just a few days. Remember, the pass mark on these exams is ~70%, which means there is less room for error than what you may be used to.
The exam syllabus has a wide breadth. I would use the 100 meter puddle analysis; you are covering a little bit of each of many topics. This lends itself well to setting a schedule. When you sign up for your exam date, take a look at the number of days you have left and set yourself up an Excel spreadsheet with all the topics and your goal completion date. Don’t forget to leave yourself time for practice problems!
2. Get a Good Calculator, and Get Good With It.
This is a very close second in my list of most important tips. The exams will be crunched for time, and it is essential that you get familiar and accurate with your calculator. My Exam 5 (CAS – Basic Ratemaking) proctor make a comment after our exam about this: “It’s amazing to see you kids these days, bringing multiple calculators to the exam and using both your thumbs to type!”
Remember that the SOA has an approved list of calculators. For all exams I would recommend the TI-30XS MultiView (You can support this blog by buying it via the Amazon link). It has the advantage of being able to easily scroll through past calculations as well as many summary statistic functions which can provide shortcuts for certain problems. Above all the buttons on this calculator are responsive and accurate, meaning fewer mistakes. If you have any questions on how to use it please leave me a comment.
3. Choose the Right Study Material (For You)
You are “lucky” in the sense that the prelims have a large amount of study material to choose from. Many companies publishes study guides, practice exams and online exams to help you learn the material and get a feel for the types of questions you’ll be asked. Of course, you can also study from the source material (the textbooks found on the syllabus), however many exam passers you speak to will argue for their alternative study source.
Of course the one caveat for these materials is that they can get quite expensive, and seeing as you are writing your first actuarial exam you may not have the backing of a company yet to pay for it. In this case I would recommend trying the free samples that each of the companies put out – you’ll have the advantage of finding the study material that works best for you as well as getting some extra study time in.
4. Utilize Old Exams and Example Questions
These are the single most important study tool at your disposal. They’re also free! For the CBT exams, the SOA has released sets of practice questions as well as online practice exams for Exam P and Exam FM. For whatever reason the SOA doesn’t seem to have the .PDFs posted on a page on their website, but they’re easy enough to find by Googling “SOA Exam X Practice Problems”.
There will always be debates as to whether these questions are harder or easier than the actual exams, but they are definitely an excellent way to familiarize yourself with the SOA’s exam problem wording. I recommend you study these closely and ensure that you fully understand the answers.
5. Ask Yourself If You’re Being Productive
You may have heard the “100 hour rule” that is thrown around in actuarial circles. It states that for every hour an exam is, you should put in 100 hours worth of study time. For the first few exams this equates to 300 hours of quality studying. Remember, the pass rate for Exam P hovers around 50% (see Actuarial-Lookup.com). While there are always exceptions, I would be comfortable with claiming that if you follow this rule and put in 300 hours of dedicated studying time I would expect you to be in the passing half of the group. This requires discipline – ask yourself while you’re studying if you’re actually studying. Did you spend 20 minutes of the last hour browsing Facebook? That time doesn’t count.
At the same time, ensure that you take breaks. Or, if you’re on a roll but finding the material isn’t sticking, I find that switching to a new topic or question set will reboot my motivation.