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Corporate Finance and ERM (CFE) Track Old Exam DP - Design and Pricing

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  #1  
Old 01-07-2015, 10:51 AM
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Default Foundation of CFE Exam vs. SDM Exam

It looks like the SOA suggests taking Foundations of CFE Exam before taking the SDM exam. Does it actually help to do so, or can the exams be seen as totally separate from each other?
I want to start studying for my next exam but still waiting results for the ERM exam. Since there is some slight overlap in the syllabus between ERM and SDM, I'd figure I can start reading the overlapping material in case I failed ERM.
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Old 01-07-2015, 09:46 PM
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I took ERM then SDM and then CFE. I took SDM first since I had attempted the 2 hour transitional AdvF exam in spring 2013. I failed it, but all of the material from AdvF was on SDM, so it made since for me to continue on with that material. I don't think that taking them out of order is a problem at all if you are already familiar with some of the material and want to take SDM first. I feel that some of the material overlapped among all three exams, so you should be fine taking either SDM or CFE next sitting. Best of luck!
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Old 01-08-2015, 08:07 PM
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There's probably a small advantage to taking CFE first (such as learning about the math behind corporate structure, stuff about options, etc.)

There's also probably a small advantage to taking SDM right after ERM, since the material and the questions are more similar, so it's not as much of a "change." To be honest, this advantage might be slightly larger than the other one, but neither are huge.

My advice would be: look through the syllabuses and see what you think you'll be more motivated to study (and pass). All three exams are different enough, and self-contained enough, that you can take them out of order. As Sb3ar said, there is a little overlap in all of them, so what's really going to matter is "what exam are you going to feel motivated for?"

Your mileage may vary. Some people have different opinions and reasons, but I wouldn't worry too much about the order. At the end of the day, you can pass them in any order if you study hard enough.
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Old 01-18-2015, 11:20 AM
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Thanks Paul and sb3ar for the advice. I think I will end up taking SDM first since it seems like it's more closer to the ERM exam.
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Old 05-02-2018, 03:44 PM
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Hey Paul, are there any new insights (since 2015) about which exam to take first SDM or CFE or the answer above still applies?

I was going for CFE next (if I pass ERM- Fingers crossed) but reading this post I would definitely would rather study for an exam which has more similar material to ERM but on the other hand, it seems like SDM has one of the lowest passing rates so I am worried about attempting it with "less experience" per say??? and without knowing the CFE material?

Any thoughts?
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Old 05-25-2018, 11:02 PM
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I'll throw out a few thoughts on your question InboxFull:

1) I think now SDM builds on both ERM and CFE - such that having both can help on SDM. For example, ERM gets into some Risk Appetite and Economic Capital material which are moderately important on SDM. But CFE gets into How to Measure Anything and Cost of Capital Theory which are a bit more important in SDM (SDM has two other books related to How to Measure Anything and a short, but extremely important, study note on applying cost of capital theory).

2) SDM is a more "higher-level" exam than CFE and ERM as it has more 'knowledge utilization' questions (as described in the SOA Guide to Written Exams). For example, you will see *many* more "justify your answer" and case study questions and fewer "calculate" questions.

3) On a personal level, you could look at the material and see if any of it will directly help you in your current job. Back in the day, I started an Investment-related job and found particular investment track exams (when they were much, much more practical!) to be super helpful in my work and found that really motivating in my studying.

As a further important comment on (2) above, it is important to recognize the need to change gears somewhat going from CFE or ERM to SDM. A lot of students are successful in ERM and/or CFE and think they are all set for SDM, but there are enough different types of questions that you need to bring both your studying and question answering process up a notch or two for SDM!

Hope that helps!

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