Financial mathematics · second 150-minute practice PDF
Exam FM Practice Exam II: A Second Full Rehearsal
Test whether your method selection survives a fresh 30-question form across interest, annuities, loans, bonds, duration, and portfolio cash flows.
One-time USD 39 purchase for a personalized PDF. The 30 original variants are also included in the complete Financial Mathematics Proof Manual; choose this full-length timed form for curated practice and a lower entry price.
- New practice problems
- 30
- Pages
- 76
- Time limit
- 150 min
- Price
- $39
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One original Exam FM practice question with full solution
Bond A pays annual coupons of 50 for four years, redeems 1,000, and yields 5%; therefore it sells at par. Bond B has the same price and term, pays annual coupons of 40, and redeems 1043.10. Calculate Bond B’s annual effective yield.
- 3.5% annual effective
- 4.0% annual effective
- 4.5% annual effective
- 5.0% annual effective
- 5.5% annual effective
At 5%, the coupon present value and discounted 1043.10 redemption sum to 1,000. Bond B’s annual effective yield is 5.0%, so choice D is correct.
Setup
Price Bond A first; because coupon rate equals yield, its common market price is 1,000.
Model
Insert that price into Bond B’s four-payment equation and solve for its single annual yield.
Compute
At 5%, the coupon present value and discounted 1043.10 redemption sum to 1,000.
Answer
Bond B’s annual effective yield is 5.0%, so choice D is correct.
Why the other choices are wrong
- A
- Choice A (3.5%) does not match the checked yield of an equal-price bond with a different redemption result (5.0%); no distinct standard one-step error is identifiable.
- B
- Choice B (4.0%) does not match the checked yield of an equal-price bond with a different redemption result (5.0%); no distinct standard one-step error is identifiable.
- C
- Choice C (4.5%) does not match the checked yield of an equal-price bond with a different redemption result (5.0%); no distinct standard one-step error is identifiable.
- E
- Choice E (5.5%) does not match the checked yield of an equal-price bond with a different redemption result (5.0%); no distinct standard one-step error is identifiable.
Independent answer check
| Primary value | 0.05 |
|---|---|
| Primary method | Recover the common price from Bond A and solve Bond B’s yield equation. |
| Independent value | 0.05 |
| Independent method | Direct substitution of 5% reproduces the common price to cents. |
| Answer | D · agreement passed |
Contents
Inside the 76-page edition
Candidates preparing in English for the Financial Mathematics (FM) Exam
Table of contents
- A distinct 150-minute practice form
- 30 syllabus-balanced five-choice questions
- Printable answer sheet and answer key
- Complete Setup–Model–Compute–Answer solutions
- Independent verification for every result
What is included
30 verified original variants selected without duplication for this full-length timed form. Official problem wording is not included.
Verification
Every included result is reproducible
Every selected problem already passed a reproducible calculation, an independent second method, and answer-letter agreement. The compiler rejects any failed check, cross-product duplicate, or official source wording.
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Questions about this edition
Are these official sample questions?
No. Every question is an independently written original variant. Official problem wording is not reproduced.
Are complete solutions included?
Yes. Every problem includes Setup, Model, Compute, and Answer steps plus a concrete explanation for each of the four incorrect choices.
How are the answers checked?
Each answer must agree under a reproducible primary calculation and a distinct independent method before the PDF can build.
Does this overlap the complete proof manual?
Yes. These 30 original variants are selected from the verified variant bank included in the Financial Mathematics Proof Manual. This edition adds a curated full-length timed form, answer sheet, answer key, and focused purchase price.
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ActuaryProof is not affiliated with, endorsed by, or sponsored by the Society of Actuaries. Exam names are used solely to identify the exams for which these study materials are relevant. All problems and solutions are original works.
Financial Mathematics Practice Examination II
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76 pages · 30 new practice problems · $39