Preview Questions Actuary | Role Specific Skill

Question 1: Which of the following models is commonly used for long-term financial forecasting in insurance companies?

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Monte Carlo Simulation

ARIMA (Autoregressive Integrated Moving Average)

Exponential Smoothing

GARCH (Generalized Autoregressive Conditional Heteroskedasticity)

Question 2: What is the primary goal of this technique?

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To minimize the variance in claim estimations

To calculate the exact value of future liabilities

To provide a deterministic forecast of future claims

To generate multiple scenarios for future claims distributions

Question 3: In actuarial models, how do you typically handle censored data?

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By discarding the censored observations

By performing non-parametric tests

By using maximum likelihood estimation (MLE)

By imputing missing values with mean values

Question 4: Which type of financial model is most appropriate for evaluating the profitability of a new insurance product?

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Decision Tree Model

Generalized Linear Model (GLM)

Discounted Cash Flow (DCF) Model

Cox Proportional Hazards Model

Question 5: Which of the following is an example of a dynamic financial forecasting model used in actuarial science?

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Deterministic models with no assumptions about economic change

Single period cash flow models

Multi-period models that adapt to changing economic conditions

Fixed-rate cash flow models

Question 6: How do "Policyholder Behavior Models" influence pricing in life insurance, and what assumptions are made about policyholder behavior in these models?

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Policyholder behavior models are irrelevant in life insurance pricing

Policyholder behavior models forecast lapses, surrenders, and conversions, which influence premiums, with assumptions including constant behavior patterns and mortality rates

Policyholder behavior is assumed to be random and cannot be modeled

Policyholder behavior is only modeled in property insurance, not life insurance