Preview Questions Actuary | Role Specific Skill

Question 1: When interpreting stress testing results for a financial portfolio, what is typically assessed?

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The portfolio's resilience under extreme market conditions

The daily volatility of the portfolio

The average return of the portfolio under normal conditions

The total risk premium

Question 2: Which actuarial assumption is most critical when projecting pension liabilities for future retirees?

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Inflation Rate

Retirement Age

Mortality Rates

Salary Growth Rate

Question 3: How does the term "tail risk" influence the risk assessment in the banking and insurance sectors?

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It represents the risk of rare, extreme events that could have a disproportionate impact

It identifies the normal fluctuations in market prices

It measures the average loss expected in a typical market scenario

It analyzes the risk of inflation affecting long-term investments

Question 4: Which of the following is a core principle of the IFRS 17 standard for insurance contracts?

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Recognition of profit over the contract's life

Discounting of all insurance liabilities at the risk-free rate

Immediate recognition of all profits at contract inception

Capital requirement tied to the cost of capital

Question 5: When evaluating claims development patterns, which statistical technique would be most appropriate for fitting data that follows a slow, nonlinear growth trend?

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Generalized Linear Models (GLM)

Exponential Smoothing

Logarithmic Regression

Poisson Regression

Question 6: How do you assess the "Tail Risk" in financial portfolios, and what models are used to quantify and manage these extreme risks?

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Tail risk is ignored in traditional risk models, as it is assumed to be insignificant

Tail risk is irrelevant if the portfolio is diversified sufficiently

Tail risk only applies to equity portfolios and not to other asset classes

Tail risk is the risk of extreme loss in rare events, and it is assessed using models like extreme value theory (EVT) and stress testing