Lack of calculation practice problems to study

[100in1998]

I have noticed that as I am attempting to memorize the 600+ lists for this exam, I do not have many good numerical calculation problems to practice. Is anyone else interested in sharing some numerical practice problems?

I would be willing to write 2 or 3 problems from different texts and then post the question and the answer. If a dozen people are willing to do this, we would all be much better off for the exam.

Anyone else want to join?

Links to practice problems submitted
"16 (http://www.actuarialoutpost.com/actuarial_discussion_forum/showpost.php?p=2305880&postcount=16)"
"17 (http://www.actuarialoutpost.com/actuarial_discussion_forum/showpost.php?p=2307279&postcount=17)"
"30 (http://www.actuarialoutpost.com/actuarial_discussion_forum/showpost.php?p=2400889&postcount=30)"
"36 (http://www.actuarialoutpost.com/actuarial_discussion_forum/showpost.php?p=2406029&postcount=36)"

[inexactuary]

Count me in.

[100in1998]

I have written up two problems today, and next week I should be able to write up another one. I will post these and the answers once they are all complete.

BTW, if we could find 5 more people to write a few problems, we would have a good sized "practice test" to use.

Have a good weekend. I'll be enjoying my ACE memorization cards!

[wat?]

I'll be enjoying my ACE memorization cards!

Off-topic, but damn - you're memorizing already? :yikes:

[inexactuary]

Don't freak out, it's a big stack and we might not be as good of memorizers as you.

[100in1998]

I started memorizing about a week ago. I'm splitting my time between memorization (at home) and working problems (at work). I've gotten a head start since I didn't take an exam in May (finished FAP in April).

Also, my wife is due with baby #3 in about 5 weeks, so I decided to get as much memorized before I start losing sleep!

My goal it to concentrate a lot on the memorization, and go through the cards about 5 times total. My wife is also helping by quizzing me. That would be helpful, except she skips over any note cards that she doesn't understand.... so, I only get relatively easy questions from her. : )

[rekrap]

Off-topic, but damn - you're memorizing already? :yikes:

Makes sense to me, wat?... start memorizing the stuff you've already read now, so it won't seem like such a stack of stuff once you're done with all the reading/outlining.
Just like starting to work problems will let you know how strong you are on the topics you should "know" already from reading/outlining/memorizing.

It's early feedback on one's studying progress. :study:

[100in1998]

Here are the three practice problems that I created (with solutions). I do not work in an area that has expertise is any of these calculations, except for basic knowledge for the EIA one. So, if you find a bad assumption or bad formula, please suggest a correction.

Have fun! I built these in Excel, but I think that the calculations can all be done with pencil and paper. I uploaded the Word format.

[wat?]

Here are the three practice problems that I created (with solutions). I do not work in an area that has expertise is any of these calculations, except for basic knowledge for the EIA one. So, if you find a bad assumption or bad formula, please suggest a correction.

Have fun! I built these in Excel, but I think that the calculations can all be done with pencil and paper. I uploaded the Word format.

Very nice!

Quick question, because I don't recall a whole lot of the details from the texts right now: do EIA's normally charge margins and not flat %age of asset fees?

[inexactuary]

Very nice!

Quick question, because I don't recall a whole lot of the details from the texts right now: do EIA's normally charge margins and not flat %age of asset fees?

According to the study note, they do. It has the same effect as the %AV charge for a VA, but it's displayed a little differently. I think alternatively you could implicitly provide for profit by just using a less generous index crediting formula.

I have a comment on the first part of the first question. I think it might be more realistic if you include the assumption for your bond interest rate. Then you can calculate the portion of your premium needed to fund the GMAV, and the portion for profit, expenses, and hedging costs.

Also, it might be helpful to state the order in which to apply the participation rate, margin, and cap, since there is no standard.

Thanks for getting us started!

[wat?]

Don't freak out, it's a big stack and we might not be as good of memorizers as you.

I started memorizing about a week ago. I'm splitting my time between memorization (at home) and working problems (at work). I've gotten a head start since I didn't take an exam in May (finished FAP in April).

Also, my wife is due with baby #3 in about 5 weeks, so I decided to get as much memorized before I start losing sleep!

My goal it to concentrate a lot on the memorization, and go through the cards about 5 times total. My wife is also helping by quizzing me. That would be helpful, except she skips over any note cards that she doesn't understand.... so, I only get relatively easy questions from her. : )

Makes sense to me, wat?... start memorizing the stuff you've already read now, so it won't seem like such a stack of stuff once you're done with all the reading/outlining.
Just like starting to work problems will let you know how strong you are on the topics you should "know" already from reading/outlining/memorizing.

It's early feedback on one's studying progress. :study:

ITA with you guys - I mean, it certainly does make sense to memorize this early. I didn't mean for my surprise to be interpreted as "wow, you guys are memorizing already - you only need x weeks to ready, what are you worrying about?". I meant for it more to mean "holy crap, I'm behind". Which might be the kick in the :moon: I need.

[100in1998]

I have a comment on the first part of the first question. I think it might be more realistic if you include the assumption for your bond interest rate. Then you can calculate the portion of your premium needed to fund the GMAV, and the portion for profit, expenses, and hedging costs.

Also, it might be helpful to state the order in which to apply the participation rate, margin, and cap, since there is no standard.

Thanks for getting us started!

Thanks for the feedback. I do agree with your first comment. That would make it into more of a calculation problem. I was actually trying to create a little bit of a "thinking" problem, without too much stress on the actual calculation. However, I do think that this type of question could be testable. If I get some free time, I'll try to rewrite.

As far as the order of operations to apply the cap, margin and part rate, I wouldn't expect to see this stated in a question. The syllabus did not specify a "right" way to do it, so I would guess that the question would be a little bit more vague. If the question stated the order of operations, it would practically give you for formula which, I believe, is rare.

[inexactuary]

They do often say something like "applied in the order given." (This is actually how you treat it in your problem) It's probably best just to assume that if they don't say anything, but I think they usually try to minimize the number of acceptable answers (which would technically be 6 in this case).

[100in1998]

Updated EIA question per comment, and new mortality Confidence Interval question. For those interested, please post a calculation-type question or two.

[inexactuary]

Alright, here's a couple of mine. 100in1998, could you put links to all the file postings in your first post for easy reference? I actually don't know how, but I've seen wat? do it.

[wat?]

Alright, here's a couple of mine. 100in1998, could you put links to all the file postings in your first post for easy reference? I actually don't know how, but I've seen wat? do it.

You can use "url" and "/url" tags to do this. (Replace the "" marks with [].)

The post number in the upper right of your post (like inexactuary's last post was #17, so click on the "#17") will give you the single post alone.

If you want to write words and have it linked to something, like "Oh crap, I'm stuck in a black hole (http://www.actuarialoutpost.com/actuarial_discussion_forum/showpost.php?p=2307292&postcount=18)", you can quote my post and see how I wrote it in.

[100in1998]

Thanks Wat?! It only took me about 10 attempts to edit my first post to get the URL right, but I must admit that I actually learned something useful today. (using the assumption that actuarial exam material is not now nor will ever be useful)

So, I'll keep tabs on when others post more practice questions, and try to keep the links up-to-date.

Thanks inexactuary! The questions look good.

[100in1998]

With less than a month to go, I will send out the call for anyone willing to share a few practice problems that they may have written for themselves. There are a few already posted.

:bump:

[Roto]

I'm at a total loss as to what could be asked beyond a list question on this exam.

[Economic]

Updated EIA question per comment, and new mortality Confidence Interval question. For those interested, please post a calculation-type question or two.
Your EIA example is wrong. You have confused how you allocate assets with how you credit interest to the policy.

[wat?]

Alright, here's a couple of mine. 100in1998, could you put links to all the file postings in your first post for easy reference? I actually don't know how, but I've seen wat? do it.

inexactuary, thanks for the problems! Quick question - where did you come across the term "unvested recoveries"? I couldn't figure out how to apply that 5% to the problem, but after looking at the solution, I might be able to stumble across something that resembles a correct usage of the %age.

[inexactuary]

Umm... I could have sworn I saw it on a past exam question, but I can't seem to find it now. A more understandable term would have been "Agent Termination Rate", though slightly less precise.

[100in1998]

As to the sacond question of the 100in1998, I wonder why you just add $5*12 to the GSP calculation. I think we should use 5*12*ax:6%, not just the first year admin fee. Which one is right?

Yes, I was re-working that problem, and discovered that error. I was so concerned with making sure that I added the annual expense to the problem, I forgot that it would occur EVERY year. I will make a correction to the problem in the near future.

[Chance123]

Regarding the problem about calculating prices of put and call options, does anyone think a Black-Scholes calculation is realistic for this exam? I have long forgotten the specifics of this formula (I just look it up in a textbook whenever I need it). Wasn't it already covered in one of the preliminary exams? I'm just trying to convince myself I don't need to stuff my overcrowded brain with another formula.

[rekrap]

Regarding the problem about calculating prices of put and call options, does anyone think a Black-Scholes calculation is realistic for this exam? I have long forgotten the specifics of this formula (I just look it up in a textbook whenever I need it). Wasn't it already covered in one of the preliminary exams? I'm just trying to convince myself I don't need to stuff my overcrowded brain with another formula.

Unfortunately, Hardy Ch 8 specifically covers BS formulas for hedging segregated fund guarantees, so the topic is fair game. However, due to time constraints, I could see the question providing a table of option values/prices (similar Table 8.6 or 8.7), as a hedging error calculation could easily be part of the exam.

[inexactuary]

That's a good problem, although I can't match your put values.

I got 142.95 for the 5-year put and 136.92 for the 4-year put.

[100in1998]

Agreed, this is a good problem. Makes you think deeper than the B-S formulas. I got 136.064 and 133.222 for my 5 yr and 4 yr B-S, but I will admit that my Normal Distribution was roughly estimated.

Thanks for the problem! :tup:

[inexactuary]

For the 5yr, I got d1 = .454287 and d2 = -.10473. The chances of me calculating those without mistakes on an exam is pretty slim.

[Chance123]

That's a good problem, although I can't match your put values.

I got 142.95 for the 5-year put and 136.92 for the 4-year put.

I got something pretty close to those. 142.96 and 136.87.

[100in1998]

Here is another practice question about the tiresome RSLN model. Not very complicated since only one month is considered. Just for reference.

If any question, tell me please. Many thanks.

The first problem wasn't too bad, but the p(i,j) could have been labeled better. I didn't know which one was p(1,2) and which was p(2,1).

The second problem was WAY over my head. I hope it doesn't show up on the exam, otherwise I will have 0 points for that question.