Preview Questions Actuary | Role Specific Skill

Question 1: Which type of statistical distribution is most commonly used in survival analysis for modeling the time until an event occurs, such as policy lapses?

Which action should you take?

Choose only one option

Exponential distribution

Normal distribution

Poisson distribution

Binomial distribution

Question 2: What is the primary purpose of using the Kaplan-Meier estimator in actuarial studies?

Which action should you take?

Choose only one option

To predict future claim amounts

To estimate the survival function from lifetime data

To perform hypothesis testing on survival data

To calculate the mean time to event

Question 3: How does "Survival Analysis" contribute to risk assessment in life insurance, and what statistical methods are used to model survival times?

Which action should you take?

Choose only one option

Survival analysis is used only in clinical studies, not in financial modeling

Survival analysis is irrelevant in life insurance as it only applies to health data

Survival analysis models the time to event (e.g., death) using techniques like Kaplan-Meier estimators and Cox proportional hazards models

Survival analysis only applies to bankruptcy risk, not to life insurance

Question 4: Which of the following is a key regulatory document for insurers under the NAIC (National Association of Insurance Commissioners) framework in the US?

Which action should you take?

Choose only one option

The Banking Reform Act

The Insurance Regulatory Modernization Act

The Model Laws

The Financial Services Act

Question 5: Which of the following is a key disadvantage of using a VaR model for risk management?

Which action should you take?

Choose only one option

It assumes all returns are independent

It requires too much historical data

It does not capture extreme events beyond the confidence interval

It is difficult to implement computationally

Question 6: What is the significance of the "funding ratio" in a pension plan?

Which action should you take?

Choose only one option

It measures the ratio of total benefits paid to total contributions received

It represents the average salary of plan participants

It indicates the financial health of the pension plan by comparing the plan's assets to its liabilities

It assesses the investment performance of the pension fund