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FM Cheat Sheet 2026

The 30 highest-yield FM facts, distilled from real exam questions. Print it, save it as a PDF, or study it here โ€” free, no sign-up.

  1. What continuing education requirement supports financial planning competence? โ†’ Ongoing education in regulatory changes, market developments, and best practices
  2. Which formula correctly represents the accumulated value (future value) of an ordinary annuity of 1 per period for n periods at interest rate i? โ†’ s(n,i) = ((1+i)^n - 1) / i
  3. What fiduciary duty applies to risk assessment? โ†’ Act in the client's best interest with loyalty, care, and full disclosure
  4. What is the present value of $8,000 to be received 6 years from now, with a discount rate of 7% annually? โ†’ $5,394.94
  5. What continuing education requirement supports estate planning competence? โ†’ Ongoing education in regulatory changes, market developments, and best practices
  6. For a continuously varying interest rate, the present value factor v(t) is: โ†’ exp(โˆ’โˆซโ‚€แต— ฮด(s) ds)
  7. What regulatory compliance requirement applies to investment analysis? โ†’ Full compliance with all applicable federal, state, and industry regulations
  8. How should risk be assessed in tax strategies? โ†’ Evaluate risk tolerance, capacity, time horizon, and investment objectives systematically
  9. If an annuity pays $500 at the end of each month for 5 years at a nominal rate of 6% compounded monthly, the present value is calculated using i_monthly = โ†’ 0.06 / 12 = 0.005
  10. The accumulated value at the end of n periods of a level immediate annuity of 1 per period is: โ†’ s_{n|} = ((1+i)^n โˆ’ 1) / i
  11. How should risk be assessed in financial planning? โ†’ Evaluate risk tolerance, capacity, time horizon, and investment objectives systematically
  12. For the following cash flows, calculate the approximate IRR: Year 0: -$10,000 Year 1: $4,000 Year 2: $4,000 Year 3: $5,000 โ†’ 10%
  13. If a perpetuity pays $1,000 annually and the discount rate is 5%, what is the value of the perpetuity? โ†’ $20,000.00
  14. What is the present value of receiving $500 annually for 10 years if the discount rate is 8%? โ†’ $3,577.10
  15. A call option gives the holder the right to: โ†’ Buy the underlying asset at the strike price before or at expiration
  16. If the force of interest is ฮด = 0.05, what is the accumulation factor over 3 years under continuous compounding? โ†’ e^(0.15)
  17. How should conflicts of interest be managed in investment analysis? โ†’ Identify, disclose, and mitigate all actual and potential conflicts of interest
  18. What continuing education requirement supports risk assessment competence? โ†’ Ongoing education in regulatory changes, market developments, and best practices
  19. The force of interest ฮด is related to the effective annual rate i by which formula? โ†’ ฮด = ln(1 + i)
  20. How should conflicts of interest be managed in portfolio management? โ†’ Identify, disclose, and mitigate all actual and potential conflicts of interest
  21. If you receive $200 annually forever, and the discount rate is 5%, what is the present value? โ†’ $4,000
  22. Which statement about the amortization method for a level-payment loan is CORRECT? โ†’ Early payments consist mostly of interest
  23. If the sinking fund interest rate equals the loan interest rate, how do total periodic payments compare between the sinking fund and amortization methods? โ†’ Total periodic payments are identical under both methods
  24. Under simple interest, the accumulation function a(t) is: โ†’ a(t) = 1 + it
  25. How should portfolio management performance be reported to clients? โ†’ Provide accurate, complete, and timely performance reporting with appropriate benchmarks
  26. How should risk be assessed in portfolio management? โ†’ Evaluate risk tolerance, capacity, time horizon, and investment objectives systematically
  27. What continuing education requirement supports tax strategies competence? โ†’ Ongoing education in regulatory changes, market developments, and best practices
  28. A forward contract on the FM exam obligates the buyer to: โ†’ Purchase an asset at a predetermined price on a specified future date
  29. The delta of a long call option is always: โ†’ Between 0 and 1
  30. The swap rate in a plain vanilla interest rate swap is the fixed rate that makes the swap's initial value: โ†’ Equal to zero (fair swap)
Turn these facts into recall:
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