FM Study Guide 2026
Everything you need to pass the FM exam in one place: the exam format, every topic to study, real practice questions with explanations, flashcards, and full-length practice tests. Free, no sign-up needed.
📚 FM Topics to Study (21)
✍️ Sample FM Questions & Answers
1. What continuing education requirement supports portfolio management competence?
Financial markets, regulations, and best practices evolve constantly, requiring ongoing education for competent practice.
2. A portfolio holds 1,000 options with a delta of 0.6. How many shares of the underlying stock are required to delta-hedge the portfolio?
Formula: Hedge Shares = Delta × Number of Options Calculation: Hedge Shares = 0.6 × 1,000 = 1,200
3. An arithmetic increasing annuity-immediate has payments of $100, $200, $300, $400, $500 at the end of years 1 through 5. Which expression gives its present value at 5% annual interest?
An arithmetic increasing annuity with first payment P and common difference P uses (Ia)(n,i), so PV = P × (Ia)(5,5%) = 100 × (Ia)(5, 5%).
4. Which statement about the amortization method for a level-payment loan is CORRECT?
In early periods the outstanding balance is large, so interest charges are high and only a small portion of the fixed payment reduces principal.
5. The no-arbitrage forward price F₀ for a non-dividend-paying stock with current price S₀ at effective annual rate i over T years is:
The no-arbitrage forward price equals the future value of the current spot price: F₀ = S₀(1 + i)^T.
6. An annuity-due differs from an ordinary annuity (annuity-immediate) in that its payments occur at:
An annuity-due (denoted with a double-dot) makes payments at the start of each period, while an ordinary annuity pays at the end.