4/20/11 T minus 25

Wow, I haven't updated my progress in a while!

Right now I am in full swing of "study every moment I possibly can". It has been a little different having 6 months to study this time around as opposed to two months, but I think I have handled it ok. I definitely paced myself for the first four months, just building the foundation, but not wanting to either peak or exhaust myself too early. Starting at about 8 weeks out I put a little more intensity into it, and then at about 6 weeks to go the kick really kicked in to the point where I spend every spare hour I can on the material. So, I am back to where I was a year ago, studying every moment possible. I have to say I like the feeling of accomplishment of making progress and the intensity of just pushing and pushing, but I've definitely had my "I just don't get this stuff" days as well. I find no matter how badly the day goes, when I get up the next morning I am positive and ready to go again. Of course, sometimes the next day is rough as well...

At this point I feel like I am making good progress and should be in good shape by exam day. I feel like I will have strong enough grasp of the material as I have studied it and as it has been presented to me. From what I have read online, the exam can be pretty tricky and can involve some questions that are curveballs - something like a concept you know, but you have to figure out what a few things mean first, or that a few things cancel out, etc. This is going to sound a little bit silly to say, but the math on these exams isn't exactly my strong suit. I wasn't a math major, and while I certainly have some mathematical aptitude, there is a lot of things that I just don't know when it comes to certain math tricks. I still have to think pretty hard about taking a derivative, and I don't really know things like adding/subtracting/multiplying/dividing an exponential and the quadratic equation. I will brush up on those before the exam, but my fear is that I won't naturally recognize situations where those skills will be useful.

One item I purchased that has been a big help is the Actuarial Brew study questions. AB has a package of 656 questions, and the answers are classified by difficulty and generally spelled out very well. I found that in working the ASM and TIA problems, neither problem set did I feel was really helping me learn, but the AB problems have really filled that void. By studying the answers provided and knowing how difficult they rate the question, I find I am able to figure out what else I have to learn how to do and where that falls on the scale of difficulty. Having a set of problems I really liked working on is something I really took for granted in P and FM. In P I used the SOA problems, and in FM I used the TIA problems along with the SOA problems. With both of those problem sets, I felt like I could break down and attack the various topics and study the solutions along with the source material to master new knowledge. I really wasn't feeling that way about any problem set for MFE until I found the AB problems. For $45 or so these are a great value!

Ok, 25 days to go. Right now it is hard to rate my confidence in passing. My confidence that I will reach maximum preparedness is 90%, but I am a little wary of the exam itself, so on a 1-10 scale I'd rate my chances of passing at about a 5.5.

2/16/11 – T minus 88

I have been chugging along and making progress. I had one week a few weeks ago that I wasn’t able to put any study time in, and in other weeks I have been putting in 5-10 per week. I haven’t been able to utilize my work study time until this week due to year end work, so my weekly study time should start hitting the 15-20 hours per week range this week.

As far as progress in the material, I am feeling very comfortable with the basic lessons like binomial pricing and have a fair amount of comfort with the concepts of the rest of the material. I have worked on the math of all the sections at least a little bit, but I can’t say I have a very strong handle on some of them yet. I am now in the process of working on the math and problem solving of the Black Scholes formula and the lognormal distribution, and expect to delve into the nitty gritty of the formulas and problem solving of all the remaining sections over the next few weeks. Hopefully a month from now I can feel much stronger with the math of all the sections, and can just work problems for the remaining 50-60 days.

One thing I really have noticed is how valuable the mp3 lessons available on The Infinite Actuary are becoming to me. I used the TIA lessons for my initial review of the material, but I find the real benefit I get from the lessons is to be able to listen to them in my car every day. I have a 35 minute commute each way, which is about the length of one lesson. Once you have gone through the material once or twice and tried some problems, you should be familiar enough with the concepts and formulas so that the TIA mp3s are pretty easy to follow along with in the car. I am finding them really useful for practicing formula memorization, thinking through concepts, etc. In thinking back, I have listened to TIA lessons while mowing the lawn, shoveling snow, and doing general work around the house. This kind of reinforcement is really valuable, especially as it serves as kind of a “hidden” extra study time. Thus far I have put in about 65 hours of actual sitting down and focusing study time, but I have probably put in almost that much in listening to the TIA lessons over and over. I estimate I will put in another 65 or so just listening to the lessons and not counting that as my study time that I keep track of.

My confidence level in passing is still pretty high – I would say a 7.5 right now.

1/3/11 – T minus 130

Ok, so I never did get through the last few sections in as much detail as I anticipated by 1/1. I’ve given all the material a once over, but some of it was a very light once over.

As it stands, most of the first 75% of the material I feel fairly confident I can get down once I start working the problems. The last 25% (Brownian Motion, Ito’s Lemma and Interest Rate models) I either didn’t get to a point of confidence in just reading through the material or didn’t spend much time on at all in my read through. At this point, I am going to start working problems on the first 75% of the material, and will work on fully understanding and mastering those last few concepts once I get to them in my problem sets. I feel that will be the best strategy, as even if I spent another week working on them now, by the time I got to them in problem sets some of that understanding may have faded.

There are about 18 weeks left until the test. TIA has 311 practice problems, and ASM has 479, for a grand total of 790. I’m not sure exactly how I plan to attack these and in what time frame. I’d like to be comfortable with questions from all the sections by the end of March, then I can begin going back and reviewing some of the questions I may already have forgotten!

I will report back in as I start getting through practice problems this week.

My confidence in passing at this point is fairly high – I’d say it is about an 8. I expect working the problems to be very tough and perhaps discouraging at times, but I know if I just put in the time and keep working I should get there by the test date.

12/22/10 - MFE Study update

I am on schedule for my review of the TIA material, but I have taken a different approach than I originally thought I would. I find it tough to spend a day or two working problems when in the back of my mind I know there is more material I want to get to, so after Section C I switched to reviewing the material without working on the associated problems. This will allow me to get through the material on a first run a little faster, and I can then get to working problems on all the material.

As of today, I am on Section G. I am not sure how much I will be able to get through with the holidays coming up, but I do expect to be done with my first review around 1/1/11 and starting to focus on working problems by then. I am sure I will have to go back and review material once I get into the problems, which is to be expected.

As of right now, I am fairly confident of being able to pass the exam. There are a ton of formulas and concepts to learn, but I have a lot of time to do so. I should be able to get over 300 hours of study in before the day of my exam, so lack of time won’t be an issue. I haven’t run into anything that I haven’t been able to comprehend, so it is just a matter of solidifying the knowledge. I understand that the hardest material is the last two sections, so I am prepared to have to spend a little more time to wrap my head around these.

One thing I have learned is not to plan on doing too much studying between Thanksgiving and New Years. There is just too much going on to be able to spend much time and energy studying. I think in future years I will continue to use that time period for my first read through of the material, much like I did this year.

11/23/10 - MFE Study Schedule

Ok, I have been spending a little more time looking at the MFE material, and this is the schedule I am going to start with. I am using the Sections as broken out in TIA, as that will be my primary source. I will also be reading along in ASM with each section.

Each date listed is what I plan to work on in the week beginning on that date.

11/13/10 - TIA A. Parity and Other Relationships
11/20/10 - TIA B. Binomial Trees
11/27/10 - TIA C. Black-Scholes Formula
12/4/10 - TIA D. Market Making
12/11/10 - TIA E. Exotic Options
12/18/10 - TIA F. Lognormality
12/25/10 - TIA G. Stochastic Differential Equations
1/1/11 - TIA H. Interest Rate Models

In each week, I plan to review all the lessons, work to memorize the appropriate formulas, and work through the end of lesson questions. My plan is to have a comfort level with each section by the end of the week, knowing what formulas I still need to memorize, and knowing that I know how to approach the problems.

I know this study schedule finishes 4 months before the exam! I will reassess where I am at the end of this schedule. Right now I intend to begin working practice problems more seriously after finishing the lessons, with the intention of memorizing all the formulas and working the problems in good time. Realistically, I may decide certain lessons need more attention first, etc.

Currently, I am working through the lessons in section B. There are still some formulas I need to start memorizing, and then I will try to work practice problems starting tonight or tomorrow night.

11/18/10 - Beginning Studying for MFE

Ok, I have just begun to study for MFE. I have about 25 weeks left until the exam, so I certainly have plenty of time to tackle it. Hopefully, I can average 2 hours per day over those weeks, which will give me 350 hours of studying.

I am going to use The Infinite Actuary's online seminar as well as the ASM manual. Back in September I worked through the first few chapters of ASM, but I am going to start from scratch here.

Yesterday, I did the Section A.1 of TIA, which was on Put Call Parity. This was really just a review of stuff I learned in FM, and it came back to me after a little bit. It was almost easy enough to make me overconfident, but I know I have a long way to go!

Today I looked at Section A.2, which dealt with options on currencies, bonds, and exchange options. The currency options I know I had a good handle on back in September, but the execution wasn't exactly coming back to me tonight. I am going to have to note formulas as I go along and keep them right near my monitor at work for frequent review. I will have to spend a little more time on this section before moving on, perhaps in combination with A.3 over the next few days.

There are 28 lessons grouped into 8 categories in the TIA seminar. I will have to put some thought into a schedule for me to tackle them. Although it seems like I have quite a while, I think this material is going to take a lot of work.

Should I start ending each post with a confidence level of passing this early? No, I don't think I will. As I get through more of the material and put a structure on my study schedule that will help me gauge my confidence level.

10/19/10 update

Ok, lots to update here! Well, maybe not lots, but one significant item - I was offered that position I interviewed for within my company! I accepted on the spot of course. I start there on 11/1. With the position, my exams will be paid for, I will get study materials, etc. It will be awesome!

I believe it was a combination of a strong work history as well as the two exams that made me stand out for the position. I'm sure there are a lot of candidates just out of school, with one internship perhaps, and two or three exams, but perhaps this gives hope for those of us that are "middle aged" and are deciding to look at this career. I asked about people who are career changing in my interviews for this position, and people have come from much more diverse backgrounds that me. I was in an operations position already within the company, and with a solid work history there that really helped me stand out - but even people with good work histories in unrelated fields are people that stand out, according to some of the people I interviewed with.

So, I have been only glancing at the MFE material for now, and plan to start the real study effort after 11/1. I'm going to put a testing date countdown on the blog, but that will be tentative until the actual test date is confirmed. Looks like MFE will be going from a fixed test date to a Computer Based Test with flexible dates in 2011, as I get more info I will pass along updates.