Looking for a fail-proof way to solve those difficult…long…wordy…tedious…questions on Exam P and FM? In this post, I’m going to go through a six-step formula that I create so that you don’t get overwhelmed or panicked when you come across one of them on your exam!
Sometimes I know when you see a problem that’s really long and wordy, with a lot of information, it just feels like you don’t even know where to start. So if you have this six-step formula memorized, you can go through and complete each of the small steps and then eventually you’ll come with a solution at the end (hopefully!).
The first thing you need to do is read through the question thoroughly. And during this time you’re not going to write anything down. You’re just going to read so that you know everything that the question gives you.
The next step is going to be to write down everything that the question gives you, in mathematical terms. Sometimes the question will give you things like interest rates, expected values, distributions, for example. You’ll write all those down in mathematical terms.
Now in step 3, you’ll write down what the question is asking you for, in mathematical terms too. So once you have all that information, all written down, you won’t really need to refer to the question anymore because you’ll have everything you need right in front of you.
Moving onto step 4 now… which is to draw a picture or diagram. This isn’t always possible. For FM you can sometimes draw a timeline, for P you can sometimes draw a graph. You won’t always be able to do this step though! You can skip it.
In step 5 you’re going to write down the formula for what the question is asking you. Back in step 3 you wrote down in mathematical terms what the question was asking you and now you’re going to use your knowledge of the topics that you’ve studied to come up with a formula for that. Maybe it’s something like variance for example, where you need the E(X^2) and the E(X). This is where you’ll write down the formula for exactly what the question is asking.
Finally in the last step, step 6, you’ll actually get to solving! You’ll take each of the pieces in the formula from step 5 that you’ve already written down and you’ll figure out how you’re going to solve for each of those pieces. Once you’ve done that, you should be able to put everything together and come up with the final solution.
Now I know this sounds pretty simple when you break it down into these 6 steps but you really have to make sure that you know these 6 steps off by heart so when the time comes when you’re feeling overwhelmed or panicked, you can think back to these steps and conquer the question.
You should use this even when you’re doing practice problems too, not just on the exam. It’s a good idea to practice this well before exam day so you’re used to each of the steps.
Here they are again, one more time:
1. Read through the question carefully and thoroughly
2. Write down in mathematical terms everything that the question has given you
3. Write down exactly what the question is asking for, making sure to pay attention to any small details
4. Draw a diagram or timeline
5. Write down the formula for step 3 using your knowledge of the exam topics
6. Solve for each of the pieces needed in the formula from step 5.
Hope it helps 🙂