Preview Questions Actuary | Role Specific Skill

Question 1: 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 2: In which of the following scenarios would stress testing be most relevant for an actuarial regulatory compliance analysis?

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When determining a company's dividend payout strategy

When calculating the fair value of assets

When evaluating the solvency position under extreme market conditions

When determining the actuarial assumptions for future liabilities

Question 3: In survival analysis, what is the purpose of the Cox Proportional Hazards Model?

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To measure the variability in survival times

To estimate time-to-event without covariates

To estimate the effect of explanatory variables on survival

To analyze the residuals of a survival model

Question 4: What does the European Insurance and Occupational Pensions Authority (EIOPA) primarily regulate under Solvency II?

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Risk-based capital requirements

International accounting standards

Interest rate risk for investments

Foreign exchange rate adjustments

Question 5: When considering the impact of inflation on insurance pricing, which method is commonly used to forecast future claims costs?

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Chain-ladder method

Inflation-linked adjustments to claim reserves

Discounted cash flow (DCF) modeling

Claims experience rating

Question 6: When assessing the performance of a portfolio using risk-adjusted returns, which of the following ratios is most commonly used in financial modeling?

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Information ratio

Treynor ratio

Sharpe ratio

Sortino ratio