Preview Questions Actuary | Role Specific Skill

Question 1: Which financial statement does the actuarial valuation of pension liabilities most directly impact?

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Statement of changes in equity

Cash flow statement

Balance sheet

Income statement

Question 2: When performing loss distribution modeling in actuarial science, which of the following distributions is most commonly used to model heavy tails in risk data?

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Uniform distribution

Normal distribution

Pareto distribution

Lognormal distribution

Question 3: What is the primary objective of "asset-liability matching" (ALM) in pension fund management?

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To match the duration of assets with the duration of liabilities

To diversify the investment portfolio to minimize risk

To maximize investment returns by taking on higher risk

To ensure that the pension fund's assets grow at the same rate as its liabilities

Question 4: What is the key advantage of using stochastic modeling over deterministic modeling in insurance risk assessment?

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Stochastic models require less computational power

Stochastic models incorporate randomness

Deterministic models can simulate more scenarios

Deterministic models use fewer data inputs

Question 5: In actuarial modeling, how do you deal with heteroscedasticity (non-constant variance) when building a regression model?

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By transforming the dependent variable using a logarithm

By using a non-linear regression model

By removing outliers from the data

By using weighted least squares regression

Question 6: Which actuarial tool is used to assess the financial impact of catastrophic events on an insurance portfolio?

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Principal Component Analysis

Linear Regression

Monte Carlo Simulation

Cluster Analysis