Every now and then I get an email from someone who would say they are interested in writing the PRMIA exams, but find the math too difficult. “I am not a math guy”. “I have no math background. I studied business.”
Without a doubt, there is some element of math involved in risk management. The PRMIA syllabus has its fair share of math. Some aptitude for math is certainly helpful, but determination takes you further. My personal view however is that even though some of the math required for the PRM exam may be stuff you may not have studied before, it is not particularly difficult if you give it a bit of attention and time. There are just a couple of concepts you need to get clear – particularly understanding how distributions, quantiles etc work, a little bit of understanding first and second derivatives, and the rest is all reasonably doable.
For those intimidated by the math, I have a couple of things to say:
1. First, the math looks more difficult than it actually is. One of the reasons for that is that the notation makes even simple things look frightening. It is easy to understand that the gas mileage on your car depends upon how fast you drive, and the pressure in your tires. But it becomes tricky if you say this as
And the above is an oversimplification on my part – replace the u, x and y with an unpronounceable Greek letter, put a sigma in the front (in case you had more than one car), a couple of superscript and subscript numbers and then it is easy to get scared. And if you want to know how well you did on your last drive, ie the marginal mileage, make it dy/dx of the above function, and you have it.
One of the things I often did when preparing for the exam would be to just circle individual parts of equations and write down in plain English what they stood for. That helped me a great deal
2. Second, do not forget that the bar is set at 60%, not 100%. You don’t have to know everything.
3. Third, determination counts for a lot. If the stuff is difficult, stick to it. Don’t give up easy. Do it once, come back again a second time. It will make more sense. Come back again a third time, it will make even more sense. Come back again a fourth time, and it will leave you ‘richer’ in your understanding and more confident. Delay the exam by a couple of weeks if you have to, that is okay. (Your riskprep subscription is running out, not a problem. Write to me and I can extend it.)
4. Fourth, you will notice there are only a few concepts that go round and keep showing up in different forms. What you learn in Exam 1 helps for Exam 2, and for Exam 3 as well.
Remember that the PRM certification is not just about math. It is about risk management that goes way beyond models. The PRM designation does not make you a quant, and you are not competing with the math PhD from Stanford.
Share your experience, and feel free to post a comment and share your experience. (You can change your screenname if you don’t wish to be known).