Master your calculator before anything else

Spend the first week learning every TVM worksheet function on the BA-II Plus. Practice clearing the calculator between problems. A calculator error on exam day can cascade through an entire problem.

Build a conversion chart for interest rates

Create a quick-reference showing how to convert between effective annual rate, nominal rate, discount rate, and force of interest. These conversions should become instant reflexes.

Draw timeline diagrams for every annuity problem

Annuity problems become much simpler when you draw the payment timeline. Mark the valuation date, payment dates, and deferral periods. This prevents confusion between annuity-due and annuity-immediate.

Learn both prospective and retrospective reserve methods

Some loan problems are much faster with the prospective method while others favor retrospective. Being comfortable with both lets you pick the faster approach on exam day.

Understand bond pricing intuitively

A bond sells at premium when the coupon rate exceeds the yield rate, at par when they are equal, and at discount when the yield exceeds the coupon. This intuition helps you catch errors quickly.

Practice duration and convexity calculations by hand

Immunization problems require accurate duration and convexity. Practice computing Macaulay duration for small portfolios by hand to build intuition for how the measure responds to changes in yield.

Study put-call parity until it feels automatic

For the derivatives section, put-call parity is the single most tested concept. Write it as C - P = PV(F) - PV(K) and practice applying it in both directions.

Work backward from answer choices

On multiple-choice problems, sometimes plugging answer choices back into the equation of value is faster than solving from scratch. This is especially effective for sinking fund problems.

Create a formula sheet and retire it before exam week

Write out all formulas by hand, then stop referring to the sheet two weeks before the exam. If you cannot reproduce a formula from memory, that topic needs more practice.

Allocate 5.5 minutes per question and use the rest for review

With 180 minutes and 30 questions, aim for 5.5 minutes each. That gives you 15 minutes at the end to revisit flagged problems and check your work on high-value questions.

FM Study Tips