About CPCU® 540

The CPCU® 540 exam is the fourth CPCU® exam in a series of eight required exams to complete your CPCU® designation.

This exam consists of 85 multiple choice questions split up into two sections:

  • 60 part A questions (concept questions)
  • 25 part B questions (case questions)

Download: CPCU® 540 Practice Exam + Formulas 

CPCU® 540 Difficulty

According to the National CPCU® pass rates, the CPCU® 540 is the hardest CPCU® exam with a 72.98% pass ratio. The numbers don’t lie; the CPCU® 540 exam is the largest in terms of content (12 chapters) and is by far the most math-intensive of all the CPCU® exams. This exam will test your will to complete the CPCU®; many students get stuck on the CPCU® 540 and give up after failing a couple of times. Prepare yourself now and set aside a little extra study time for the CPCU® 540 because there are a lot of new concepts to grasp and a lot of formulas to memorize.

For more information, see our CPCU® 540 difficulty blog.

CPCU® 540 Topics

The CPCU® 540 exam focuses on the topics of finance and accounting including financial statements, valuations, investment management and capital management. The reason this exam is so tough is because the questions are heavily math intensive. There are A LOT of formulas to know for the CPCU® 540 exam.

According to The Institutes, there are 34 math formulas that you’ll be required to know to pass the CPCU® 540 exam, but we estimate that there’s closer to 80 formulas that you need to pass the CPCU® 540. Of these 34 formulas; 7 of them are provided to you at the exam (The Institutes will give you the formula) and 27 are not provided to you at the exam (meaning you’ll have to memorize the formula). In addition, The Institutes will provide you with 4 tables to use on the CPCU® 540 exam including: future value table, present value table, future value of an annuity table and present value of an annuity table. You not only have to memorize the formulas but you have to know when to use each formula and how to apply the formulas to a given case question.

For a full list of CPCU® 540 formulas, download our CPCU® 540 practice exam and list of formulas.

Most Important Topics

The formulas are the most important aspect of the CPCU® 540 exam, in particular, the formulas and content from CPCU® 540 chapter 6 (Cash Flow Valuation) and CPCU® 540 chapter 7 (Bonds and Stocks) are crucial to passing the CPCU® 540 exam.

For more information about exactly which chapter 6 and chapter 7 formulas are important, see our CPCU® 540 most important topics blog.

CPCU® 540 Formulas

The Institutes will provide you a small list of some formulas on the CPCU® 540 exam, you do not need to memorize these formulas because they will be given to you. The list of formulas provided to you on the CPCU® 540 exam includes:

  • Future Value Over a Single or Multiple Period
  • Future Value Over Multiple Periods With Payment Periods Less Than One Year
  • Present Value Over a Single or Multiple Periods
  • Future Value of an Annuity
  • Present Value of an Annuity
  • Present Value of a Perpetuity
  • Net Present Value
According to The Institutes, there are 34 formulas that are NOT given to you on the CPCU® 540 exam. Unfortunately, this greatly underestimates the actual number of formulas that you’ll need to memorize for the CPCU® 540 exam. According to our count, there are approximately 80 CPCU® 540 formulas that you should know before taking the CPCU® 540 exam.
 

These are the 3 most important formulas on the CPCU® 540 exam, memorize these:

  • Present and future value tables
  • CAPM
  • Annual rate of return

For more information about the CPCU® 540 formulas that you need see our blog on the most important CPCU® 540 formulas.

CPCU® 540 Calculator

According to The Institutes, this is the criteria for an approved calculator:

Examinees may bring their own solar or battery powered calculators, including business/financial calculator, as long as the calculators are:

  1. not equipped with alphabetic keys
  2. not capable of storing words
  3. not equipped with a paper tape

For more information about the calculators you can use on the CPCU® 540 exam and how to get your calculator approved, see our CPCU® 540 calculator blog.

More Resources:

For more insight into the CPCU® 540 exam, check out our other helpful resources:

Other CPCU® Exams

The CPCU® 540 exam is the fourth in the series of eight exams required to earn the CPCU designation. Other CPCU® exams include:

 

 

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