Preview Questions Actuary | Role Specific Skill

Question 1: In financial forecasting, how do actuaries typically adjust for inflation in long-term forecasts?

Which action should you take?

Choose only one option

By applying a random walk model

By incorporating stochastic processes for inflation

By using the geometric Brownian motion model

By using a deterministic model based on historical inflation rates

Question 2: Which financial model would you use to assess the impact of interest rate changes on the present value of an insurance portfolio?

Which action should you take?

Choose only one option

Yield curve model

Monte Carlo simulation

Black-Scholes model

Duration model

Question 3: What is the bootstrap method in statistical analysis used for in actuarial science?

Which action should you take?

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To find the best-fitting regression line

To calculate the correlation between two variables

To estimate the mean and variance of a dataset

To estimate the distribution of a statistic by resampling with replacement

Question 4: What is the primary objective of the Basel III framework for banks?

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Optimizing the risk-to-return ratio for investment portfolios

Increasing the return on equity for financial institutions

Ensuring that banks hold sufficient capital

Strengthening the regulation, supervision, and risk management

Question 5: In a Bayesian analysis for insurance risk, what is the purpose of the prior distribution?

Which action should you take?

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To model the uncertainty of the data

To incorporate existing knowledge or assumptions

To update the claims reserves based on new data

To estimate the likelihood of claims

Question 6: Which pricing model would be most suitable for long-term life insurance products with a high degree of policyholder lapse?

Which action should you take?

Choose only one option

Mortality rate model

Generalized Linear Model (GLM)

Stochastic mortality model

Black-Scholes pricing model