Preview Questions Actuary | Role Specific Skill

Question 1: When using linear regression in actuarial analysis, what is typically assumed about the residuals?

Which action should you take?

Choose only one option

They should follow a Poisson distribution

They should be normally distributed with a mean of zero

They should have a mean equal to the dependent variable

They should have a variance of 1

Question 2: What is the purpose of a policyholder's lifetime value in the context of insurance pricing models?

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To estimate the future premiums the insurer will collect

To estimate the cost of claims over the lifetime of the policy

To calculate the policyholder's risk profile

To adjust for operational costs over the lifetime of the policy

Question 3: When using Monte Carlo simulations in insurance risk models, which of the following is most critical for accurate results?

Which action should you take?

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Minimizing the number of iterations in the simulation

Choosing an appropriate probability distribution for inputs

Ensuring all inputs are normally distributed

Using deterministic methods

Question 4: In loss reserving for a non-life insurance company, which statistical model is used to estimate the future losses based on incurred data?

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Chain-ladder method

Survival model

Generalized linear model (GLM)

Bayesian hierarchical model

Question 5: What is the impact of increasing the discount rate assumption on the pension plan liabilities?

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It decreases the liabilities

It has no impact on liabilities

It increases the liabilities

It increases the funding ratio

Question 6: How does the use of a smoothing technique in pension fund asset valuation affect the funded status?

Which action should you take?

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It increases the risk of underfunding

It reduces the short-term volatility of the funded ratio

It reduces the predictability of future contributions

It has no significant impact on the funded ratio