Module 9

Question 1

Professionals with
specialized knowledge of
the mathematics of
finance, statistics,
demographics, risk
management and
probability theory.

Answer 1

Actuary

Question 2

Individual responsible for
reporting to an insurance
company’s
management/directors
any imminent risks that
could imperil the
company.

Answer 2

appointed actuary

Question 3

A number that indicates
the likelihood that some
future event will have a
particular outcome.

Answer 3

probability

Question 4

The type of probability
where there are only two
mutually exclusive
possible outcomes.

Answer 4

simple probability

Question 5

In a simple probability
calculation, the
component that
represents the number of
outcomes that satisfy the
condition.

Answer 5

numerator

Question 6

The component in a
simple probability
calculation that
represents the number of
possible outcomes, each
being equally likely.

Answer 6

denominator

Question 7

Two events, where the
occurrence of one event
means that the other
event cannot occur.

Answer 7

manually exclusive events

Question 8

Two events, where one or
the other must happen;
the probability of each of
the two events must sum
to 1.

Answer 8

collectively exhaustive events

Question 9

The probability of two
independent events
both occurring.

Answer 9

compound probability

Question 10

Events where the
outcome of one event
does not influence the
outcome of a second
event.

Answer 10

independent events

Question 11

Events where the
outcome of one event
affects the outcome of a
second event.

Answer 11

dependent events

Question 12

P(A and B) = P(A) X P(B)

Answer 12

notation for probability of an event

Question 13

A concept that states
that the greater the
number of samples or
occurrences, the greater
the likelihood that the
average result will
approach the expected
result.

Answer 13

law of large numbers

Question 14

The probability that a
person will die at a given
age.

Answer 14

mortality rate

Question 15

Data compiled through
census statistics and
death records or based
on insurance data.

Answer 15

mortality statistics

Question 16

A table that shows rates
of death that occurred in
a defined population
during a selected time
interval or survival from
birth to any given age.

Answer 16

mortality table

Question 17

In a mortality table, the
process of smoothing to
correct for anomalies in
the data.

Answer 17

graduation

Question 18

The rate at which
sickness and injury occur
among a defined group
of people.

Answer 18

morbidity

Question 19

Information used by
insurers to forecast future
claims costs and
establish premium rates
for disability insurance
coverage.

Answer 19

morbidity data

Question 20

Tables used to forecast
the frequency of benefit
claims as well as the
severity, size, and
duration of each claim.

Answer 20

morbidity tables

Question 21

The process of
accounting for the
impact of probability
when calculating life and
disability reserves.

Answer 21

taking the expected value