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Questions tagged [actuarial-science]

Actuarial science is a discipline that uses mathematics and statistics to assess risk. The mathematics involved in actuarial science includes probability, statistics, finance, life insurance mathematics, and more.

Actuarial science is a discipline that uses mathematics and statistics to assess risk. The mathematics involved in actuarial science includes probability, statistics, finance, life insurance mathematics, computer science and more.

Originally, actual science used deterministic models in the construction of tables and premiums. It has gone through revolutionary changes since the proliferation of high-speed computers and the union of stochastic actuarial models with modern financial theory.

To be used with more specific tags, such as , and . See https://en.wikipedia.org/wiki/Actuarial_science for more information.

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Two questions on nominal rates of interest

I'm reading Marcel B. Finan's A Basic Course in the Theory of Interest and Derivatives Markets: A Preparation for the Actuarial Exam FM/2 and have difficulty with two of his questions. Problem 9.6 (page 73) is (paraphrased): Given that…
not William Sealy Gosset
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A question in Finan's FM/2 book

Problem 6 on page 47 of Marcel B. Finan's A Basic Course in the Theory of Interest and Derivatives Markets: A Preparation for the Actuarial Exam FM/2 is: Fund A is invested at an effective annual interest rate of 3%. Fund B is invested at an…
not William Sealy Gosset
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Beta distribution for exam P?

I had a quick question regarding the beta distribution and exam P for actuaries. From the recommended books that I have seem, beta distribution does not seem like it is likely to show up on the P exam. However, some of the example problems that I…
hyg17
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Using the Uniform Distribution of Deaths assumption

It was my understanding that the Uniform Distribution of Deaths assumption (UDD) is that during a year people die at a constant rate, i.e.: for any two intervals within a year, if the intervals are the same length, then the same number of people…
Zaz
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Compound interest with discounted rate in the time period

A note for \$250 dated August 1st 2010, is due with compound interest at $i=9\%$, 4 years after date. On November 1st 2011, the holder of the note has it discounted by a lender who charges $i=7.5\%$. What are the proceeds? So the way I approached…
Random Student
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Finding ratio of interest rates

I'm reading through Marcel B. Finan's A Basic Course in the Theory of Interest and Derivatives Markets: A Preparation for the Actuarial Exam FM/2 on my own and am unsure how to proceed with a question (page 99, question 11.29). It is: On January 1,…
not William Sealy Gosset
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Finding the outstanding balance on a loan

Smith borrows 27,000 to purchase a new car. The car dealer finances the purchase with a loan that will require level monthly payments at the end of each month for 4 years, starting at the end of the month in which the car is purchased (assume the…
Matt Robbins
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Interest Theory- Annuity Withdrawals/Deposits

"Consider an investment of $5,000 at 6% convertible semiannually. How much can be withdrawn each half−year to use up the fund exactly at the end of 20 years?" To solve this problem, an equation of value would be set between 5000 and the unknown…
Mel
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The average of random samples problem

the following is the problem that I am working on. A random sample of size 16 is to be taken from a normal population having mean 100 and variance 4. What is the 90th percentile of the distribution of the sample mean $\overline{X}$ ? This is what…
hyg17
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Conditional probability problem with three events

I am solving this problem. Given... $P[W|T]=0.8, \space P[W|T \cap G]=.65, \space P[W | G' \cap T]=1$ Find $P[G'|T]$ I understand that what I am looking for is $$P[G'\cap T]/P[T]$$ or perhaps $$(1-P[G \cap T])/P[T]$$. I also know that…
hyg17
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Thiele differential equation for reserves

I am supposed to solve the below question using Thieles differential equation, and I am having a hard time formulating Thieles differential equation for this specific insurance case and would appreciate some help in doing this. This is a question in…
idlatva
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Accumulated Value and Present Value of Perpetuities

So I've currently been learning about perpetuities in my actuarial math class and have come to a conceptual roadblock in the topic of infinite annuities. More specifically finding a present value for something that is infinite in size doesn't make…
aort01
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Amortization Formula：$B_{t+1}=B_t\cdot (1+i)-R$ .Why is this established?

According to the book,The theory of interest, at page 158, I found this formula: $$B_{t+1}=B_t\cdot (1+i)-R,$$ while $B_t$ means the outstanding balance at time $t$ and $R$ means the installment payment at the end of each period. I don't get why…
zoey_413
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