Free Exam FM (Financial Mathematics) Exam Questions and Answers
Exam FM (Financial Mathematics) is part of the Society of Actuaries credentialing pathway. SOA exams are steps on a single sequenced pathway to Associate and then Fellow, using mnemonic codes rather than numbers — P for probability, FM for financial mathematics, FAM, SRM, PA and the advanced ALTAM and ASTAM papers. Results are reported on a 0 to 10 scale where 6 and above passes, and the pass mark is fixed before the exam is sat rather than curved.
The first 10 questions on this page are free to read, answers included — no account and no card. A plan opens the rest of the bank, the full timed practice test and your weak-topic reporting.
Last updated: September 12, 2026
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Question #1
A company invests $10,000 at an interest rate of 5% compounded annually. What will be the total amount after 3 years?
Please select an optionIncorrectCorrect answer: A
The formula for compound interest is A = P(1 + r/n)^(nt). Here, P = 10000, r = 0.05, n = 1, t = 3, so A = 10000(1 + 0.05/1)^(1*3) = $11,576.25.
Was this answer correct?Question #2
If a bond pays a coupon of $50 annually and has a yield to maturity of 5%, what is its price if it matures in 5 years?
Please select an optionIncorrectCorrect answer: C
The price of a bond can be found using the present value of future cash flows, discounted at the yield to maturity. PV = C/(1+r)^t.
Was this answer correct?Question #3
An investment yields $1,500 after the end of the first year and grows by 10% each subsequent year. What will be the value at the end of year 4?
Please select an optionIncorrectCorrect answer: B
The future value of growing cash flows can be calculated using the formula FV = C * (1 + growth rate)^n, where C = $1,500.
Was this answer correct?Question #4
A $1,000 par value bond is selling for $950 with a coupon rate of 6%. What is the current yield?
Please select an optionIncorrectCorrect answer: A
Current yield = Annual coupon payment / Current market price = $60 / $950 = 6.32%.
Was this answer correct?Question #5
If a financial asset costs $5,000 today and is expected to generate cash flows of $2,000 per year for 3 years, what is the net present value (NPV) if the discount rate is 8%?
Please select an optionIncorrectCorrect answer: C
NPV = _ (Cash Flow / (1 + r)^t) - Initial Investment. Calculate NPV for each cash flow and sum them.
Was this answer correct?Question #6
A perpetuity pays $200 annually, and its price is $2,500. What is the implied discount rate?
Please select an optionIncorrectCorrect answer: C
The formula for the value of a perpetuity is Price = Cash Flow / Discount Rate, so Discount Rate = Cash Flow / Price = 200/2500 = 8.00%.
Was this answer correct?Question #7
You purchased an asset for $8,000, and you expect to sell it for $10,000 after 5 years. If the discount rate is 5%, what is the present value of the future selling price?
Please select an optionIncorrectCorrect answer: C
PV = Future Value / (1 + r)^t. Here, FV = 10,000, r = 0.05, and t = 5. Calculate to find PV.
Was this answer correct?Question #8
An investment of $1,200 at a rate of 4% compounded semi-annually grows to what amount in 10 years?
Please select an optionIncorrectCorrect answer: C
Use the formula A = P(1 + r/n)^(nt). Here, P = 1200, r = 0.04, n = 2, t = 10. Calculate A.
Was this answer correct?Question #9
A company expects a cash inflow of $100,000 in 5 years. If the required rate of return is 10%, what is the present value of that cash inflow?
Please select an optionIncorrectCorrect answer: C
Present Value = Future Value / (1 + r)^t. Calculate to find PV for the cash inflow.
Was this answer correct?Question #10
You invest $1,000 in an interest-bearing account with a rate of 3% compounded quarterly. What will be the amount in the account after 5 years?
Please select an optionIncorrectCorrect answer: D
Use A = P(1 + r/n)^(nt). P = 1000, r = 0.03, n = 4, t = 5. Calculate A.
Was this answer correct?
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FAQ
Learn More: https://www.soa.org/programs/soa-certificates/
- Q1: What is the Exam FM (Financial Mathematics) exam?
- A: Exam FM (Financial Mathematics) is a SOA certification exam. Judging by the questions in our bank, it concentrates on years, rate, compounded, year and investment.
- Q2: What topics does the Exam FM (Financial Mathematics) exam cover?
- A: Questions in our Exam FM (Financial Mathematics) bank cluster around years, rate, compounded, year, investment, discount, annually and stock. Working through the full set is the quickest way to find which of these you are weakest on.
- Q3: How should I prepare for Exam FM (Financial Mathematics)?
- A: Work through the Exam FM (Financial Mathematics) practice questions here, checking your answer on each one, then sit the practice test to rehearse the exam under timed conditions before the real thing.
- Q4: Are these real Exam FM (Financial Mathematics) exam questions?
- A: They are drawn from officially released past questions and from community members who have sat Exam FM (Financial Mathematics). Answers are verified and updated weekly.
- Q5: Where do I register for the Exam FM (Financial Mathematics) exam?
- A: Register through SOA directly at https://www.soa.org/programs/soa-certificates/. Exampractice is not affiliated with SOA and does not administer the exam.
- Q6: Is there a free Exam FM (Financial Mathematics) sample?
- A: Yes. Every Exam FM (Financial Mathematics) page shows a free sample of real questions. Upgrading opens the full bank and the practice test.
- Q7: What are SOA Certification Exams?
- A: SOA (Society of Actuaries) Certification Exams validate your expertise in actuarial science and risk management. These certifications demonstrate your proficiency in mathematical, statistical, and financial concepts essential for analyzing and managing risk in insurance, finance, and other industries.
- Q8: Why should I pursue SOA Certification?
- A: SOA Certification enhances your professional credibility, showcasing your skills and knowledge in actuarial science. This can lead to better job opportunities, higher salaries, and career advancement in actuarial, financial, and risk management roles.
- Q9: What are the benefits of SOA Certification?
- A: Benefits include recognition as a certified actuary, improved job performance, access to exclusive resources, continuing education opportunities, and staying current with the latest actuarial practices and industry standards.
- Q10: Who should take SOA Certification Exams?
- A: Aspiring actuaries, financial analysts, risk managers, and anyone involved in analyzing and managing financial risk should consider these certifications to validate their expertise and advance their careers.
- Q11: What types of SOA Certification Exams are available?
- A: SOA offers various certification paths, including:
- Q12: How do I prepare for SOA Certification Exams?
- A: Preparation can include official SOA study materials, preparatory courses, practice exams, online tutorials, and hands-on experience in actuarial work.
- Q13: Where can I take SOA Certification Exams?
- A: SOA Certification Exams can be taken at authorized testing centers worldwide, providing flexibility to fit your schedule and location.
- Q14: How do SOA Certifications impact my career?
- A: SOA Certifications significantly boost your career by demonstrating your expertise to employers, making you a more competitive candidate for advanced roles and promotions in actuarial science, finance, and risk management.
- Q15: Are there any prerequisites for SOA Certification Exams?
- A: Some exams may have prerequisites, such as foundational knowledge in mathematics, statistics, and finance. Check the specific requirements for each certification path on the SOA website.
- Q16: How often do I need to recertify for SOA Certifications?
- A: SOA Certifications do not require mandatory recertification. However, staying updated with the latest actuarial practices and continuing professional development is recommended to maintain your skills and relevance in the industry.