Ch1 Financial Risk

Question 1

What do actuaries and quants do

Answer 1

Financial professionals who deal with the financial impact of risk typically with a long term outlook

Question 2

What are some things that actuaries do for work

Answer 2

Analyse the past
Model the future
Assess and mitigate risks involved
Communicate what results mean in financial terms

Question 3

In depth things actuaries do

Answer 3

Financial modelling
Understanding of broader economic and business environment
Analysis and management of uncertainty
Evaluation of financial consequences
Analysis of risk management
Pricing and reserving
Asset liability management
Financial management

Question 4

What is the difference between actuaries and quants

Answer 4

Actuaries consider risks related to assets and liabilities

Quants focus more on risks related to assets

Question 5

What is the risk equation

Answer 5

Risk = uncertainty + value

Question 6

What is uncertainty

Answer 6

Calculating probability of something happening and whether something happens at a certain time and certain value

Question 7

What is value

Answer 7

In actuarial applications there is often a financial consequence or value associated with it

Question 8

What is the actuarial control cycle

Answer 8

Representation of the dynamic nature of actuarial work and a useful framework for actuarial problem solving

Question 9

What are stages of the actuarial control cycle

Answer 9

Specifying the problem
Develop the solution
Monitoring experience

Question 10

What is the actuarial control cycle influenced by

Answer 10

General commercial and economic environment
Professionalism