Actuarial Notes

Exam CFE-201

CFE 201 – Corporate Finance is an exam of the Society of Actuaries' Fellowship (FSA) pathway. Its syllabus covers the Mar 2027/Jul 2027 sittings.

Learning Objectives

Corporate Finance (15–29%) The candidate will understand how an organization optimizes its corporate finance decisions based on its business objectives.

  1. Recommend an optimal capital structure for given business objectives and the competitive environment
  2. Evaluate and apply the methods to determine the value of a business or project, including the impact of financial and non-financial factors on capital budgeting and allocation decisions
  3. Assess the impact on value creation from business strategies such as acquisitions, divestitures, or reinsurance

Readings:

  • Video: Introduction to CFE 201 (Background)
  • Valuation, Measuring and Managing the Value of Companies, Tim Koller, Marc Goedhart, David Wessels, 8th Edition, 2025
    • Ch. 10: Framework for Valuation (excluding “Problematic Modifications to Discounted Cash Flow” and “Alternatives to Discounted Cash Flow” sections) (1a, 1b)
    • Ch. 27: Cross Border Valuation (excluding “Using Translated Foreign-Currency Financial Statements” section) (1a, 1b, 1c)
    • Ch. 35: Capital Structure, Dividends, and Share Repurchases, “Setting a Target Capital Structure” section only (pp 679-688) (1a, 1b, 1c)
    • Ch. 31: Mergers and Acquisitions (1a, 1b, 1c)
    • Ch. 22: Leases • Ch. 40: Flexibility (1a, 1b 1a, 1b)
  • CFE201-100-23: Hurdle Rate Definition (1a, 1b)
  • International Reinsurance Landscape Overview for United States Life and Annuities, SOA Research Institute, Section 2 only (1a, 1c)
  • CFE201-111-27: Life & Annuity Reinsurance Sidecars: From Sidebar to Headline Topic (1a, 1c)
  • CFE201-112-27: Private Capital in Insurance 2.0: Building a Flywheel (1a, 1c)
  • CFE201-113-27: Financial Risks in Mergers and Acquisitions: A Case Study of SolarCity’s Acquisition by Tesla (1c)

Financial Statement Analysis (21–35%) The candidate will understand how to gauge an organization’s performance through an evaluation of its financial reports.

  1. Analyze the reported financial statements and the interrelationships among them, in order to measure financial performance
  2. Identify unusual or questionable accounting practices and analyze their impact on the quality of key financial metrics
  3. Analyze the impact of accounting policies related to taxes and foreign exchange rates on financial statements

Readings:

  • International Financial Statement Analysis, Robinson et al, 4th Edition, 2020
    • Ch. 6: Financial Analysis Techniques (2a)
    • Ch. 9: Income Taxes (2c)
    • Ch. 11: Financial Reporting Quality (2a, 2b)
    • Ch. 15: Multinational Operations (2c)
  • CFE201-103-25: Bank Profitability (2a)
  • CFE201-113-27: Financial Risks in Mergers and Acquisitions: A Case Study of SolarCity’s Acquisition by Tesla (2a)

Managerial Accounting and Operational Excellence (9–20%) The candidate will understand how managerial accounting and operational processes impact an organization’s performance evaluation and decision making.

  1. Assess how managerial accounting can drive decision making and impact behavior and performance evaluation
  2. Assess and recommend methods used to allocate costs and how these methods can distort perceived performance
  3. Recommend best practices in business processes to achieve operational excellence

Readings:

  • Accounting for Decision Making and Control, Zimmerman, Jerold, 10th Edition, 2020 (3a, 3b)
    • Ch. 5: Responsibility Accounting and Transfer Pricing
    • Ch. 7: Cost Allocation: Theory
    • Ch. 9: Absorption Cost Systems
  • CFE201-106-25: Procurement, Early Warning Systems, and the Next Disruption (3c)
  • CFE201-107-25: Financial Institutions and Nonfinancial Risk: How Corporates Build Resilience (3c)
  • CFE201-108-25: When Nothing is Normal Managing in Extreme Uncertainty (3c)
  • CFE201-114-27: Managing Allocations Effectively in the Insurance Sector (3b, 3c)
  • CFE201-115-27: Reorganizing to Capture Maximum Value Quickly (3c)

Evolving Quantitative Methods and Technologies (25–45%) The candidate will understand the appropriate application of evolving quantitative methods and technologies that help to manage the business.

  1. Evaluate the appropriateness of applying evolving methods and technologies to manage specific business issues
  2. Apply evolving methods and technologies for quantifying and managing business risks and opportunities

Readings:

  • Fundamentals of Machine Learning for Predictive Data Analytics, Kelleher, John D., Mac Namee, Brian and D’Arcy, Aoife, 2nd Edition, 2020 (4a, 4b)
    • Ch. 2: Data to Insights to Decisions
    • Ch. 9: Evaluation
    • Ch. 12: Case Study: Customer Churn
    • Ch. 14: The Art of Machine Learning for Predictive Data Analytics
  • Decentralized Finance for Actuaries, SOA Research Institute, Mar 2022 (4a, 4b)
  • Decentralized Insurance Alternatives: Market Landscape, Opportunities and Challenges, SOA Research Institute, Sep 2022, pp. 9-26 (4a, 4b)
  • Peer-to-Peer Insurance: Blockchain Implications, SOA, Mar 2021 (4a, 4b)
  • CFE201-116-27: A Method for Estimating the Price of Stablecoin Insurance (4a, 4b)
  • CFE201-117-27: AI Agents vs. Agentic AI: A Conceptual Taxonomy, Applications and Challenges, Section IV, V (pp. 16-30) (4a, 4b)
  • CFE201-118-27: Seizing the Agentic AI Advantage (4a, 4b)
  • CFE201-119-27: How Insurers Can Supercharge Their Strategy with AI (4a, 4b)
  • CFE201-120-27: How AI Could Reshape the Economics of the Asset Management Industry (4a, 4b)

Source Material

Source Material

  • Video: Introduction to CFE 201
    • Background
  • Valuation, Measuring and Managing the Value of Companies, Tim Koller, Marc Goedhart, David Wessels, 8th Edition, 2025
    • Ch. 10: Framework for Valuation (excluding “Problematic Modifications to Discounted Cash Flow” and “Alternatives to Discounted Cash Flow” sections) (1a, 1b)
    • Ch. 27: Cross Border Valuation (excluding “Using Translated Foreign-Currency Financial Statements” section) (1a, 1b, 1c)
    • Ch. 35: Capital Structure, Dividends, and Share Repurchases, “Setting a Target Capital Structure” section only (pp 679-688) (1a, 1b, 1c)
    • Ch. 31: Mergers and Acquisitions (1a, 1b, 1c)
    • Ch. 22: Leases • Ch. 40: Flexibility (1a, 1b 1a, 1b)
  • CFE201-100-23: Hurdle Rate Definition
    • Outcomes 1a, 1b
  • International Reinsurance Landscape Overview for United States Life and Annuities, SOA Research Institute, Section 2 only
    • Outcomes 1a, 1c
  • CFE201-111-27: Life & Annuity Reinsurance Sidecars: From Sidebar to Headline Topic
    • Outcomes 1a, 1c
  • CFE201-112-27: Private Capital in Insurance 2.0: Building a Flywheel
    • Outcomes 1a, 1c
  • CFE201-113-27: Financial Risks in Mergers and Acquisitions: A Case Study of SolarCity’s Acquisition by Tesla
    • Outcomes 1c
    • Outcomes 2a
  • International Financial Statement Analysis, Robinson et al, 4th Edition, 2020
    • Ch. 6: Financial Analysis Techniques (2a)
    • Ch. 9: Income Taxes (2c)
    • Ch. 11: Financial Reporting Quality (2a, 2b)
    • Ch. 15: Multinational Operations (2c)
  • CFE201-103-25: Bank Profitability
    • Outcomes 2a
  • Accounting for Decision Making and Control, Zimmerman, Jerold, 10th Edition, 2020
    • Ch. 5: Responsibility Accounting and Transfer Pricing (3a, 3b)
    • Ch. 7: Cost Allocation: Theory (3a, 3b)
    • Ch. 9: Absorption Cost Systems (3a, 3b)
  • CFE201-106-25: Procurement, Early Warning Systems, and the Next Disruption
    • Outcomes 3c
  • CFE201-107-25: Financial Institutions and Nonfinancial Risk: How Corporates Build Resilience
    • Outcomes 3c
  • CFE201-108-25: When Nothing is Normal Managing in Extreme Uncertainty
    • Outcomes 3c
  • CFE201-114-27: Managing Allocations Effectively in the Insurance Sector
    • Outcomes 3b, 3c
  • CFE201-115-27: Reorganizing to Capture Maximum Value Quickly
    • Outcomes 3c
  • Fundamentals of Machine Learning for Predictive Data Analytics, Kelleher, John D., Mac Namee, Brian and D’Arcy, Aoife, 2nd Edition, 2020
    • Ch. 2: Data to Insights to Decisions (4a, 4b)
    • Ch. 9: Evaluation (4a, 4b)
    • Ch. 12: Case Study: Customer Churn (4a, 4b)
    • Ch. 14: The Art of Machine Learning for Predictive Data Analytics (4a, 4b)
  • Decentralized Finance for Actuaries, SOA Research Institute, Mar 2022
    • Outcomes 4a, 4b
  • Decentralized Insurance Alternatives: Market Landscape, Opportunities and Challenges, SOA Research Institute, Sep 2022, pp. 9-26
    • Outcomes 4a, 4b
  • Peer-to-Peer Insurance: Blockchain Implications, SOA, Mar 2021
    • Outcomes 4a, 4b
  • CFE201-116-27: A Method for Estimating the Price of Stablecoin Insurance
    • Outcomes 4a, 4b
  • CFE201-117-27: AI Agents vs. Agentic AI: A Conceptual Taxonomy, Applications and Challenges, Section IV, V (pp. 16-30)
    • Outcomes 4a, 4b
  • CFE201-118-27: Seizing the Agentic AI Advantage
    • Outcomes 4a, 4b
  • CFE201-119-27: How Insurers Can Supercharge Their Strategy with AI
    • Outcomes 4a, 4b
  • CFE201-120-27: How AI Could Reshape the Economics of the Asset Management Industry
    • Outcomes 4a, 4b