This is the third of a series of books intended to help individuals to pass
actuarial exams. The present manuscript covers the financial economics seg-
ment of Exam M referred to by MFE/3F.
TheflowoftopicsinthebookfollowsverycloselythatofMcDonald’s Deriva-
tives Markets. The book covers designated sections from this book as sug-
gested by the 2009 SOA Syllabus.
The recommended approach for using this book is to read each section, work
on the embedded examples, and then try the problems. Answer keys are
provided so that you check your numerical answers against the correct ones.
Problems taken from previous SOA/CAS exams will be indicated by the
symbol