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Exam P (Probability) | SOA | How to Register and Pass the Exam?

24 Sep 2019

Exam P is one of the very first exams you’ll face immediately after your degree on your way to becoming an actuary. You have an option of going with it or exam FM.

Passing any of them is a requirement if at all you want to join the actuarial ranks – no way around this.

But then, just how much do you know about this important actuarial examination? Being a sure thing that you have an interest in the actuarial profession, there is no doubt you’ve heard about it a couple of times.

The details you have are sketchy for a larger part. And that isn’t exactly what you want when you’re looking into pursuing something to the very end. You need as much information as you can get hold of.

And since you’re here, you’re a few steps away from knowing all that there is about your pursuit – Exam P.

Have a go at it.

Exam P – What it is?

Exam P is a multiple-choice test (from A to E) – one among the different exams offered by the Society of Actuaries (SOA). It is aimed at building up your knowledge of important probability tools essential in quantitative risk assessment.

But what will be the use of these tools if you can’t use them to tackle issues as an actuary? Of course, not much. That’s why the Exam P not only exposes you to these tools but also puts an emphasis on how they can be used to formulate solutions to problems in the actuarial sphere.

But in developing your understanding and application of these probability tools, it is expected that you are conversant with:-

Risk management and insurance – just the basics.
Calculus – be good at this. No second-guessing. So you better start taking radical measures if some concepts give you headaches.

The exam is offered through computer-based testing and has a set duration of 3 hours.

Exam P Topics

As you’ve seen above, Exam P is about probability tools. But as with any other syllabus, it is organized into topics.

Each one of these topics accounts for a certain percentage of the whole exam – and has pre-set goals and outcomes for you as a learner.

The three topics are:

General probability
Univariate random variables
Multivariate random variables

A univariate distribution refers to the distribution of a single random variable. In contrast, a multivariate distribution refers to the probability distribution of a group of random variables. For example, a multivariate distribution could be used to specify the probabilities of returns of a group of n stocks.

And now a deep dive…

General Probability

Accounts for the smallest portion of the overall exam – usually 10 to 17 percent.

The objective of general probability is to equip you with an understanding of basic probability concepts. So by the end of it all, you should be able to:-

Define and calculate conditional probabilities.
Calculate probabilities using both multiplication and addition rules.
State Bayes theorem and the law of total probability. Besides, you should be able to use the two to calculate conditional probabilities.
Give definitions of set functions, Venn diagrams, sample space, and events. Also, you should be in a position to define probability as a set function on a collection of events and state the basic axioms of probability.
Define independence and be able to calculate probabilities of independent events
Calculate the probabilities of mutually exclusive events.
Use combinatorics such as combinations and permutations to calculate probability.

Univariate Random Variables

The univariate random variables topic accounts for between 40 and 47 percent of the whole test.

The learning objective is for you to get a grip on important concepts of discrete and continuous univariate random variables and how they can be applied in different scenarios.

The variables here include Poisson, geometric, exponential, hypergeometric, uniform, gamma, binomial, mixed, normal and negative binomial.

The following should be at your fingertips by the time you’re through with this topic:-

Applications of transformations.
Conditional probabilities – you should be able to work them out.
Definitions of both probability generating functions and moment generating functions. You should also be in a position to use them to calculate probabilities and moments.
Random variables, probability and probability density functions, and cumulative distribution functions – be able to explain and apply their respective concepts.
Determining the sum of independent random variables, that is Poisson and normal.
Working out expected value, higher moments, median, mode, and percentile. Additionally, you should be able to explain in no uncertain terms what each one of them means.
Variance, standard deviation, and coefficient of variation – what each one of them means and how to find them using the given information.

Multivariate Random Variables

Just like univariate random variables, multivariate random variables can make 40-47% of the whole test. The two account for the largest portion of Exam P.

It serves the purpose of developing your knowledge in key concepts involving multivariate random variables – and that also includes the bivariate normal.

Here’s what is expected of you as a learner by the end of this topic:-

Be good at explaining and applying joint moment generating functions.
Be able to state and apply the Central Limit Theorem.
Be in a position to explain and execute calculations touching on joint probability functions, cumulative distribution functions, and probability density functions.
Have a knack for finding moments for conditional, joint, and marginal random variables.
Be able to find the distribution of the transformation of jointly distributed random variables. Aside from that, you should have the ability to find the distribution of order statistics from a set of independent random variables.
Have the ability to determine marginal and conditional probability functions, probability density functions, and cumulative distribution functions.
Evaluate joint moments, for example, correlation coefficient and covariance.
Be able to work out probabilities and moments for linear combinations of independent random variables.
Evaluate standard deviation and variance specifically for marginal and conditional probability distributions.

Just so you know the percentage of the exam each of the topics makes up may vary from time to time. Also, it’s not always the case that a question targets a single topic.

Some questions may require that you combine your understanding of varied concepts under each one of the above topics to solve them.

Who should start with Exam P?

Sure, Exam P and Exam FM are the first exams you sit for on your way up to becoming an actuary, at least for most people. It all depends on the route you decide on.

No matter the direction you choose, Exam P is going to be either your first or second test – that is if you’re doing your actuarial exams under the Society of Actuaries (SOA).

You may decide to go with either property and casualty or health and life insurance.

For the property and casualty option, you have the flexibility of choosing between the Casualty Actuarial Society (CAS) and the Society of Actuaries. Either way, you’ll still encounter Exams P and FM as the very first tests. The only difference is in their names – under CAS, they are referred to as Exam 1 and Exam 2 respectively.

For the health and life insurance option, you only have SOA as far as the actuarial exams are concerned. Of course, you can choose to either be a Fellow of the Society of Actuaries (FSA) or a Chartered Enterprise Risk Actuary (CERA). Or even both.

And as with property and casualty, Exam P and Exam FM are the ones that will introduce you to the world of actuarial exams. So regardless of the route you choose to follow, the two are a must first-encounter.

So the question is: when should you start with Exam P?

When to Start With Exam P?

Ideally, you can start with any of these two preliminary exams – no problem with it.

But to start with Exam P, you should have a thorough grasp of calculus. It is a significant part of the whole syllabus and is applicable in meeting the above learning objectives.

So go ahead with P first if you find mathematics particularly darling. If not, you’re better off going with Exam FM as you plan for the future when you’re in a better position to handle all those integrals.

Registering for Exam P

To be on the next batch of Exam P candidates, you have to be informed of the process, dates, requirements and any provisions for special cases.

Here’s a breakdown of each one of these.

The process

The process is a simple two-step activity. The first step is the actual registration where you sign up for the exam on the SOA website. The second step is booking a seat at the nearest CBT Prometric center.

In between these two steps, there is a period of between 3-5 business days. This when you wait to hear back from SOA after you’ve turned in your details.

Let’s look at each one of these steps in more detail.

STEP 1

Before the registration period is over, turn in your details through the SOA website – and that is before midnight U.S. Central Time on the date the registration period is slated to end.

Though online registration is a preference, you can also opt for paper application forms. And as with online application, the forms must be turned in before midnight U.S. Central Time on the deadline date. The forms can be accessed via the SOA website on the exam homepage when the test is offered in paper and pencil format.

Naturally, both of the above require that you fill in your name. And that calls for utmost care – in the order in which you fill your first and second names and the spellings.

The order and spellings must be in sync with those on the identification you will provide (more on the identification later). Any inconsistencies will lead to your application being rejected.

So that means you forget about any of those nicknames or name variations. And it doesn’t matter that people call you by your middle name. You can’t use it in the application process in the place of your first name. Remember: what matters is your official identification.

Additionally, you should bring up any legal name change(s) occurring between the registration date and the day of the exam.

STEP 2

Before moving on to step 2, it is important to look at the waiting period mentioned above. What happens during the wait is the deciding factor of whether or not to proceed to this second step.

After submitting your details, SOA sends over an acknowledgment letter via the email you provided (within an hour or so). The letter contains your candidate/eligibility number which is not activated at this point.

Be on the lookout in the next 3-5 business days for the second email – a letter of confirmation this time. The email means your eligibility number has been activated and, therefore, you should proceed with step 2 – scheduling an appointment at a CBT Prometric center.

It is important to move with speed on this step if you don’t want to be inconvenienced – like finding your local Prometric center stack full on the day you should be sitting for your Exam P.

You can schedule a seat by any of the following two ways:-

Online – just log on to prometric.com/SOA and click schedule my test. Follow the prompts until you’re done with the whole process. As a candidate in Canada, you can choose between French and English. If you go with French, you’ll have your screen split into two – one in that French and another in English. Only the exam will be in English but you have the option of translating individual questions to French by the click of a button.
Telephone – just dial the Prometric’s Candidate Services Contact Centre. Be sure to reference “SOA/CIA” exam. Check out the contact numbers here.

Dates

SOA opens registration for 6 weeks. To know when the next registration will open, follow the following steps:-

Head over to the Yearly Examination Calendars.
Click CBT schedule/calendar.
Look for the exam and the month of administration.
Find the registration deadline and from it, count 6 weeks backward.

Keep an eye out on the deadlines and be sure to submit your details within the required period. Trying to register when the period has elapsed is pointless – you won’t be considered.

You have 6 chances in a year to sit for Exam P as that is the number of times it is administered – that is in January, March, May, July, September, and November; Basically the odd months.

Fees Payment

SOA accepts several payment methods with which you can use to clear the examination fees. They include Master Card, Visa, and American Express.

If you are applying through paper, then remember to mail your application with credit card information, money order or check – whatever your preferred method of payment.

Exam P costs $225 for CBT and $190 for pencil and paper. Note that these fees are non-refundable. So once you take the jump, there is no turning back – unless you give up on your cash.

Testing Accommodations

SOA strives to give everyone an equal opportunity in attempting Exam P. So even with a documented disability that affects your experience during the exam, you’ll have a level playing field as long as you bring this up.

And that’s the whole purpose of testing accommodations.

Common testing accommodations include:-

Use of magnification devices.
Approval to bring injectable medicine like insulin.
Permission to walk around.
Reserved seating position like away from windows to minimize the glaze.
Use of voice recognition software.
Braille version of the exams.
Extended testing time.
A go-ahead to bring and eat food in the testing room.

And so on. This list is to give a rough idea of the testing accommodations available. Check out this document for a more exhaustive list.

Also, note that testing accommodation is not a guarantee. SOA will review your request individually before deciding on whether to honor your request or not. So it’s a good idea to go in with an open mind.

Just fill the form and wait.

Some of the considerations you want to have before requesting accommodations are

Is it reasonable? – your request should not be a matter of personal preference but should stem from a disability.
How your request affects the exam at large – your accommodation request will only be considered if it does not interfere with the validity, reliability or security of the exam. Additionally, the test accommodation should give an unfair edge over other candidates.
How it will impact SOA in general – your request should not expose the society to unjustifiable financial and administrative strain.

Find more details about testing accommodations here.

Here are a few more resources to aid you in case you have to request for testing accommodation

Preparing for Exam P

At Analyst Prep, we have all you need as far as sharpening your probability wits is concerned.

Aside from getting up-to-date study materials, here are a few other great takeaways

A comprehensive question bank.
Customizable quizzes and performance metrics.
Round-the-clock support.
Written and video notes.

What’s more, you get advice from people who’ve been there, done that. Have a look at the full advantages of studying for Exam P with us.

Turning up for the exam

Finally, the exam day is here. It’s time to head out to the Prometric center you scheduled a seat.

While at it, remember there are rules that you have to adhere to – for the greater good of everyone. And the staff at your center of choice is like your tour guide in ensuring the rules are obeyed. So it helps to listen to whatever it is he/she has to say.

As a candidate, you’re expected to turn up at least 30 minutes before the start of the exam. This leaves enough time for preliminary procedures outlined below. Being late will cost you an opportunity to sit for the exam (and your money) since you won’t be allowed into the testing room.

Other expectations on your side include

Leaving any non-authorized personal belongings outside of the testing room.
Hanging on your identification the entire time you will be at the center.
Carrying only the basics to the center. There is limited space so coming with every other tidbit you think you might need is not a good idea.

At the Prometric Centre

Have a valid personal identification issued by the government. The identification should have a photo of you, your name, and your signature.
Avail the same identification for scanning to prove its validity.
You will be required to sign in at the center. Make sure the signature you put down matches the one on your ID.

In the testing room

Only have authorized electronic calculators with you (BA-35, BA II Plus, BA II Plus Professional, TI-30Xa, TI-30X II and T-30XS).
Remain seated at your assigned computer terminal unless permitted to do otherwise by the proctor.
Review a pre-exam tutorial.
Promise to keep everything to yourself – by agreeing to the terms and conditions of the confidentiality and conduct agreement.

These are just some of the conduct guidelines you’ll be required to play by when you turn up for your Exam P. Grab everything you need to know from this page.

Grading

Your performance for this actuarial exam is gauged between 0 and 10. Where, of course, the further away from that zero the better it is.

But getting a 5 isn’t better than getting a 4 – both of them represent a fail. To be on the safe side, you’ll have to score from 6 to 10.

Results

You can have your scores by checking out Online Transcript Access on SOA’s website, 8-11 weeks after the exam. To know if you’ve passed, give it a week and check the exam results page to see if your name is among those published.

Wrapping Up

So that’s all about Exam P.

If you’re looking to sit for it, then it’s only natural that you be informed adequately. And picking scraps of information from people around you is not how you go about it.

From registering, preparing and finally doing it – all the details are up there. Over to you now – when are you jumping into the deep end?