The clock on the semester is quickly ticking down, and the FIN401 final exam is just a few short weeks away! As the time dwindles, your stress level rises – you begin to consider all of the material you have to study and compare it to the relatively small amount of time left.
There are at least 10 chapters to read for this frustratingly cumulative exam – then you calculate that you will have to read and answer the questions for half of a chapter per day, every day, in addition to all of the work in your other courses, your job, any extra-curricular activities, commuting to and from school, etc.
Even if you are somehow able to manage all of that, you still have no extra time to do any practice exams. You immediately start to rationalize which portions of the course you can eliminate without completely destroying your grade.
For many students, the chapter readings are the first thing to go, followed quickly by the end-of-chapter problems. You then start to believe that going over a few of the examples done in class and an old exam will be enough to get by – you get a crib sheet, right?
Avoiding the Slippery Slope
Once you get to this point, it’s a slippery slope – it now looks like there’s lots of time left to study, so you begin to relax and procrastinate. How long can making a crib sheet really take? you ask yourself, as the subconscious guilt begins to trickle in.
The closer the exam gets, the more you rely on the idea that a perfect crib sheet alone will get you through the exam with a decent grade. You may even spend hours preparing it – shrinking a binder full of class notes (assuming you took some) into a tiny, barely legible format so that you can cram as much material as possible onto both sides of a single 8.5” by 11” sheet of paper.
By this point, for some students, the guilt over spending so much time preparing the crib sheet (and almost no time, if any, spent on practicing the material and actually building an understanding of it) becomes a heavy burden. For others, they can now rest easy – they think their crib sheet is a work of art guaranteed to sail them through the final exam.
Regardless of which group you fall into, the bad news is this: the outcome doesn’t look good.
The Good News
Thankfully, there is some good news – not all hope is lost!
There are eight main topics:
- Capital Budgeting & Cost of Capital
- Capital Structure
- Dividend Policy
- Raising Capital
- Risk Management
- Mergers & Acquisitions
If you were to spend the majority of one day on each of those topics – reading through the chapter, doing some end-of-chapter-problems, and practicing some Lyryx and old final exam questions for that topic – you would likely be well on your way to at least passing the final.
As you prepare for each topic, make a list of the relevant formulas that you may need and types of questions that you have seen come up repeatedly (for example, break-even EBIT).
At the end of the eight days, you can assemble these lists into one supremely high-quality crib sheet. Don’t forget – for any material you don’t understand, your instructor can be an extremely helpful resource.
We offer office hours for a reason – we want to help. Of course, asking us for help does require early preparation!
I hope that I haven’t scared you too much with this post, though I would also caution you against being overly confident – a little bit of exam fear for FIN401 is healthy!
If you’ve already started studying, you’re well on your way to getting through this exam. If you haven’t started studying yet, it would be a really wonderful idea to do so – the earlier, the better.