Preview Questions Actuary | Role Specific Skill

Question 1: How does the Central Limit Theorem apply to actuarial analysis?

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It ensures that all actuarial models will converge to a normal distribution.

It determines the exact variance in large datasets.

It states that the distribution of sample means will be approximately normal, regardless of the shape of the population distribution.

It allows actuaries to ignore data distribution and focus solely on sample size.

Question 2: Under Solvency II, which of the following is the most significant risk category that insurance companies need to address in their capital requirements?

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Liquidity risk

Operational risk

Underwriting risk

Market risk

Question 3: In a pricing model for health insurance, which actuarial technique is used to adjust for moral hazard and adverse selection?

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Experience rating

Risk equalization

Claims triangulation

Pooling of risk

Question 4: What is the primary difference between deterministic and stochastic methods in financial forecasting?

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Deterministic methods model uncertainty, while stochastic methods are precise

Stochastic models assume constant economic conditions, deterministic models do not

There is no significant difference between the two

Deterministic methods use fixed inputs, while stochastic methods incorporate randomness

Question 5: Which of the following assumptions has the largest effect on the actuarial cost of a defined benefit pension plan?

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Retirement age assumption

Employee turnover assumption

Mortality rate assumption

Discount rate assumption

Question 6: In actuarial financial forecasting, which of the following best defines stochastic modeling?

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A method that uses random variables to predict a range of possible outcomes

A process of extrapolating past data trends for future predictions

A forecasting model that assumes the same outcome every time

A technique that uses historical data to calculate deterministic forecasts