Preview Questions Actuary | Role Specific Skill

Question 1: The Solvency II framework applies to which types of entities in the European Union?

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Only life insurance companies

Investment firms only

Only banks with significant insurance subsidiaries

All insurance and reinsurance companies

Question 2: What is the difference between "Defined Benefit" and "Defined Contribution" pension plans, and how does this difference affect actuarial pricing models?

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Defined Benefit and Defined Contribution plans are essentially the same from an actuarial perspective

Defined Benefit plans are more profitable for employers than Defined Contribution plans

Defined Contribution plans do not require any actuarial pricing models

Defined Benefit plans provide a guaranteed retirement benefit based on factors like salary and years of service, while Defined Contribution plans depend on employee contributions and investment returns

Question 3: When applying triangulation methods in actuarial work, how is the data typically organized?

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In a matrix format, with age on one axis and time on the other

In a table showing claim amounts and corresponding frequencies

By grouping data based on geographic regions

By organizing claims into a time series format

Question 4: What is the purpose of a copula in multivariate risk modeling for insurance portfolios?

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To model and simulate the joint distribution of multiple random variables

To transform non-linear data into a linear form

To perform clustering on policyholder data

To reduce the dimensionality of large datasets

Question 5: Which regulatory framework introduced the Standard Formula for calculating capital requirements for insurance companies?

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Solvency II

IFRS 9

Basel III

MIFID II

Question 6: In the context of risk-adjusted return on capital (RAROC), what does it measure?

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The risk-adjusted profitability of capital allocated to a business unit

The return earned in excess of the risk-free rate

The total return of an investment portfolio

The correlation between different asset classes