Question 1
Omar will receive 10 annual payments of $10,000, the first one 6 years from now. The annual effective interest rate is 6.0%.
Calculate the present value of the payments.
The Exam FM syllabus: five topics and their weights
Exam FM has five topics. Annuities and the portfolio topic carry the most weight, and every topic builds on time value of money.
| Time Value of Money | 5–15% of the exam |
|---|---|
| Annuities | 20–30% of the exam |
| Loans | 15–25% of the exam |
| Bonds | 15–25% of the exam |
| General Cash Flows, Portfolios and Asset Liability Management | 20–30% of the exam |
Time Value of Money
- Simple and compound interest, present, current and accumulated values
- Effective and nominal rates of interest and discount, and force of interest
- Inflation and real rates, and equations of value
Annuities
- Annuity-immediate, annuity-due and perpetuities
- Level payments, and payments in arithmetic or geometric progression
- Finding the payment, the term, the rate or the value
Loans
- Level payment amount, term, rate and principal
- Outstanding balance at any time
- Interest and principal in a payment, refinancing, drop and balloon payments
Bonds
- Price, book value, premium and discount
- Yield rate, coupon rate, redemption value and term
- Callable bonds priced for a minimum yield
General Cash Flows, Portfolios and Asset Liability Management
- Yield curves, spot rates and forward rates
- Macaulay and modified duration, and convexity
- First-order approximations to a change in present value
- Redington and full immunization, and cash-flow matching
The format
30 multiple-choice questions in 2.5 hours, each with five choices. A few are unscored pilot questions you cannot tell apart. An unanswered question counts as wrong, so answer every one.
Try 3 questions
Question 2
Cy borrows $10,000, repaid by level payments at the end of each year for 5 years at an annual effective interest rate of 8.0%.
Calculate the interest in payment 3.
Question 3
An asset pays $1,000 at the end of year 1, $2,000 at the end of year 2 and $3,000 at the end of year 3.
Calculate its Macaulay duration at an annual effective interest rate of 5.0%.
Next step
Questions people ask
What topics are on Exam FM?
Five: Time Value of Money (5 to 15%), Annuities (20 to 30%), Loans (15 to 25%), Bonds (15 to 25%) and General Cash Flows, Portfolios and Asset Liability Management (20 to 30%).
How many questions are on Exam FM?
30 multiple-choice questions in 2.5 hours, about five minutes each.
Are interest rate swaps on Exam FM?
The December 2026 syllabus has five topics and does not list interest rate swaps among them.