Preview Questions Actuary | Role Specific Skill

Question 1: In a scenario where the mortality rate for a specific group is plotted against age, what type of graph is most appropriate to interpret this data?

Which action should you take?

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A boxplot

A histogram

A time-series plot

A scatter plot

Question 2: In survival analysis, what does the hazard function represent?

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The average time until an event occurs

The baseline risk of an event occurring regardless of time

The cumulative probability of an event occurring up to a specific time

The probability of an event occurring at a specific time, given survival until that time

Question 3: Which of the following would be the most appropriate method to price a portfolio of property insurance policies in areas prone to frequent natural disasters?

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Catastrophe modeling

Generalized linear models (GLM)

Time-series analysis

Mortality risk modeling

Question 4: In a pricing model for annuities, what would you use to adjust for interest rate risk over the expected term of the policy?

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Liability-driven investment (LDI) strategy

Use of stochastic discount rates

Discounted cash flow (DCF) method

Modified duration analysis

Question 5: In catastrophe modeling, which of the following is critical for estimating aggregate losses?

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Loss distribution

Scenario analysis

Stochastic volatility

Discount rate

Question 6: How does "Portfolio Optimization" apply to financial modeling in the insurance industry, and what methods do you use to balance risk and return?

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Portfolio optimization is irrelevant as it only applies to stock trading

Portfolio optimization models the trade-off between risk and return by adjusting asset allocations based on expected returns and variances

Portfolio optimization focuses on long-term profitability, not risk management

Portfolio optimization only works for non-financial data