Preview Questions Actuary | Role Specific Skill

Question 1: What is the purpose of using Maximum Likelihood Estimation (MLE) in actuarial statistical modeling?

Which action should you take?

Choose only one option

To estimate the probability distribution of data over time

To test the hypothesis about the population mean

To estimate the parameters of a model that maximize the likelihood of observing the given data

To calculate the mean and variance of a dataset

Question 2: Which financial instrument is most commonly used by pension funds to hedge against interest rate risk?

Which action should you take?

Choose only one option

Commodity Futures

Equity Options

Interest Rate Swaps

Credit Default Swaps

Question 3: Which of the following is an assumption of regression-based actuarial models when forecasting claim costs?

Which action should you take?

Choose only one option

There is a linear relationship between independent and dependent variables

The data points are not correlated

Residuals follow a non-normal distribution

All independent variables have the same variance

Question 4: In the context of risk management, what does Value at Risk (VaR) measure?

Which action should you take?

Choose only one option

The risk of default on a bond in a financial portfolio.

The potential loss in the value of an asset or portfolio over a specified period for a given confidence interval.

The average expected return of a portfolio over a specified period.

The volatility of an asset's price movement over time.

Question 5: In actuarial financial forecasting, what is the function of a liability adequacy test?

Which action should you take?

Choose only one option

To forecast claim volume for specific policies

To estimate future profit margins

To calculate the company's risk exposure

To determine whether reserves are sufficient to meet future claims

Question 6: In Solvency II, which entity is responsible for overseeing compliance with the regulatory requirements?

Which action should you take?

Choose only one option

The European Insurance and Occupational Pensions Authority (EIOPA)

The National Competent Authorities (NCAs)

The European Central Bank (ECB)

The International Association of Insurance Supervisors (IAIS)