Hi I want to know whether I have to buy the ST6 CMP or is a thorough study of Hull's Options, Futures and other Derivatives + Baxter's Financial Calculus sufficient to pass the ST6 exam (i.e. after also working through past exam papers)? Thank you.
The textbooks weren't written specifically for actuarial students taking the ST6 exam and so there's a danger that by studying these independently from the ST6 CMP you concentrate your time in a sub-optimal way, eg by focussing on areas that are less liekly to be examined and glossing over areas that the examiners see as more important. Also, the Core Reading consists predominantly of sections of these two textbooks, there is also additional Core Reading that has been written for ST6, which is included and expanded upon in our CMP. Our CMP is designed to complement the textbooks and guide you through the relevant sections, provideing summaries and extra commentary where useful. It includes extra material compared with Hull in places, to reflect the detail that is likely to be required in exam questions and yet not provided in the textbooks. However, having said that, if you knew the textbooks inside out, had read the additional Core Reading and attempted every past ST6 exam paper, then I'd be very surprised if you didn't pass the ST6 exam. But I need to say I'm baised as I'm one of the CMP authors, so it would be good if a few students, past or present, could share their views on going it alone with the textbooks...
I found the level of understanding and background knowledge required for the exam somewhat higher than set out in the text books. Both books are very much recipe books on QF and there's a lot of hand waving and "trust me this is the way it works" when setting out their arguments and derivations. For my second attempt at ST6 I used Stochastic Calculus for Finance Vols 1 and 2 by Steven E. Shreve which cover the same topics but in much more detail. His coverage of the underlying calculus is excellent and gives you a real feel for what's going on without having to wade up to your hips in measure theory and martingales. For a practitioners point of view I also dipped in and out of Paul Willmot's two volume Quantitative Finance which is a "fun" read and has lots of little practical points that you don't get while sitting at your desk, head in a book. As I don't work in the field this helped a lot. Finally I read the FT (mainly Lex and the comments page) most days and this helped a lot There was one question on the paper that was a give away if you were abreast of what was going on in the real world. Hope this helps.
