CPCU® 540 Exam Format

The CPCU® 540 exam is difficult, the exam is heavily math intensive meaning the questions will be formatted a little differently than the other CPCU® exams that you’ve passed.

The CPCU® 540 exam consists of 85 multiple choice questions broken up into two sections, part A and part B.

  • Part A: Concept questions – The first section of the exam will be approximately 60 concept questions; these questions will test your understanding of a definition, topic, or formula. The multiple-choice answers will generally provide 2 or 3 partially correct answers and one “best” answer. The concept based questions of the CPCU®540 will be formatted in a similar manner to the CPCU® 530 exam questions, the questions are pretty straight forward asking about a definition or topic.
  • Part B: Case questions – The second section of the exam will be approximately 25 case questions. These questions will test your application of the information. The majority of these questions will be formula-based questions where you will be given a real-life scenario; your job will be to apply a formula to calculate and select the best recommendation given the scenario. This is the most difficult part of the CPCU®540 exam, these questions will require you to analyze a scenario to determine which formula to apply without the question directly telling you.

CPCU® 540 – Important Topics

The formulas are the most important aspect of the CPCU® 540 exam, in particular, the formulas and content from CPCU® 540 section 6 (Cash Flow Valuation) and CPCU® 540 section 8 (Bonds and Stocks). These two sections are crucial to passing the CPCU® 540 exam. We recommend you master these topics before attempting your exam. This is our opinion of the topics that are important on your exam. These topics come straight from our CPCU® 540 online course where we provide a detailed breakdown of the most important topics of each chapter, along with our difficulty and importance rank for each chapter.

CPCU® 540 Section 6

Section 6 of the CPCU® 540 exam is, in our opinion, one of the most important sections. This section covers future value and present value. Be sure to know the following from section 6 of the CPCU® 540 exam:

  • Calculate future value
  • Calculate present value
  • Calculate present value of an annuity and annuity due
  • Calculate net present value
  • How to use the present value and future value tables

Also, it’s important to remember, you’ll be provided with the future value and present value tables on the exam. It’s important to understand how to use these tables, they’ll save you lots of time, there will be LOTS of present value and future value questions on your exam. You can download the FV and PV tables here (along with a free practice exam).

CPCU® 540 Section 8

Section 8 of the CPCU® 540 is, in our opinion, another very important section. This section covers stocks and bonds, be sure to know the following from section 8 of the CPCU® 540 exam including these important topics:

  • Calculate bond rate of return
  • Calculate stock rate of return
  • Different financial markets
  • Characteristics of a bond (such as convertible bond)
  • Calculate yield

The CPCU® 540 is tough, so get started studying now and to help with your studying here’s a free CPCU® 540 practice exam and formulas sheet.

Disclaimer

Remember, every CPCU® exam is different. No single exam is the same. Be sure to study ALL topics (not just our recommendation). This resource is intended to provide you with a general idea of where your focus should be. Make sure to thoroughly study every topic of this exam.

Free Practice Exam

Ready to get started studying? We’re here to help (for free). Download our free CPCU® 540 practice exam to get a feel for the type of questions you will see on the exam. This includes the formulas and present/future value tables for your exam.

Download: Free Practice Exam (CPCU® | API™ | ARM™)

More Information

For more information about the CPCU® 540 exam, checkout some of our other free resources:

Disclaimer

Remember, every CPCU® exam is different. No single exam is the same. Be sure to study ALL topics (not just our recommendation). This resource is intended to provide you with a general idea of where your focus should be. Make sure to thoroughly study every topic of this exam.

Difficulty rank, importance rank, and the advice provided in this resource are solely the opinion of AssociatePI. This resource is intended to provide you with a general idea of where your focus should be. Each exam administered by The Institutes is different. AssociatePI is not affiliated with The Institutes or involved in the exam writing process. Please be sure to thoroughly study every chapter and every topic of this course.

CPCU® exams are administered by the American Institute for Chartered Property Casualty Underwriters (“The Institutes”). AssociatePI does not administer the actual exams, we are an independent resource of free content, advice, and study material for professional insurance education. This blog is intended for informational purposes only, to inform prospective students of the benefit of the CPCU® designation.

CPCU® and API™ are trademarks of the American Institute for Chartered Property Casualty Underwriters (“The Institutes”). AssociatePI LLC is not affiliated with, associated with, endorsed by or otherwise supported or recognized by The Institutes in any way. AssociatePI LLC is not authorized by The Institutes to offer courses, practice examinations, or any other resources related to the Institutes’ designations or other programs.

For further information, please email contact@associatepi.com.

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