Preview Questions Actuary | Role Specific Skill

Question 1: Which of the following does Solvency II require insurers to disclose in their financial statements?

Which action should you take?

Choose only one option

The exact solvency ratio required by law

The risks associated with the assets backing insurance liabilities

The internal controls for financial reporting

The expected future claims payments based on historical data

Question 2: How do you assess "Model Risk" in actuarial models, and what strategies do you employ to mitigate errors in model assumptions or predictions?

Which action should you take?

Choose only one option

Model risk can be ignored as long as the model is validated once

Model risk is irrelevant as models always produce accurate results

Model risk arises from errors in model assumptions or prediction accuracy, and it is mitigated by performing sensitivity analysis, backtesting, and using model validation techniques

Model risk is only relevant in regulatory compliance and not in day-to-day operations

Question 3: What is the probability of exactly 5 claims in a given year?

Which action should you take?

Choose only one option

0.0055

0.1412

0.0361

0.1234

Question 4: In pension plan actuarial analysis, what does the term "actuarial accrued liability" (AAL) refer to?

Which action should you take?

Choose only one option

The market value of the pension plan's investment assets

The total contributions made by employees and employers to date

The present value of benefits earned by employees up to a specific valuation date

The projected future contributions required to fund pension benefits

Question 5: Which of the following is the primary purpose of sensitivity analysis in risk management?

Which action should you take?

Choose only one option

To determine the correlation between different risk factors

To predict the exact value of the portfolio under various scenarios

To eliminate the impact of unknown risks

To measure the effect of changes in key assumptions on portfolio outcomes

Question 6: In financial modeling, what does the term "beta" represent in the context of the CAPM?

Which action should you take?

Choose only one option

The volatility of an asset relative to the market

The expected return of an asset

The correlation between two assets

The risk-free rate of return