Ch1 Financial Risk Flashcards
What do actuaries and quants do
Financial professionals who deal with the financial impact of risk typically with a long term outlook
What are some things that actuaries do for work
Analyse the past
Model the future
Assess and mitigate risks involved
Communicate what results mean in financial terms
In depth things actuaries do
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
What is the difference between actuaries and quants
Actuaries consider risks related to assets and liabilities
Quants focus more on risks related to assets
What is the risk equation
Risk = uncertainty + value
What is uncertainty
Calculating probability of something happening and whether something happens at a certain time and certain value
What is value
In actuarial applications there is often a financial consequence or value associated with it
What is the actuarial control cycle
Representation of the dynamic nature of actuarial work and a useful framework for actuarial problem solving
What are stages of the actuarial control cycle
Specifying the problem
Develop the solution
Monitoring experience
What is the actuarial control cycle influenced by
General commercial and economic environment
Professionalism