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The Smokin' Cracktuary
04-16-2008, 09:25 AM
Last year there were no questions from the handbook. But there is a great deal of material from it, mostly memorizing.

Do you think they ignored this last year because they believe it is stuff anyone can easily learn, and many people with financial degrees already have, and they consider the focus of this exam to be more towards the analytical side of things that require us to apply our actuarial background?

In other words, it is only on the syllabus for background information, and the focus is on understanding how to apply the information, not be able to regurgitate it.

invisibulman
04-16-2008, 09:31 AM
I guess my thinking is that the handbook information was ment to be incorporated into your analysis of other questions. So, yes, background.

examwritter
04-16-2008, 10:09 AM
My thinking is that those are really just for background knowledge. As for this exam, they expect more from us .....The purpose of the test is not memorization

namssa
04-16-2008, 10:42 AM
I kind of disagree that the purpose of this test is not memorization. In my experience all SOA essay exams are very memorization intensive. Even the calculation problems are more a matter of memorizing the relevant formula and plugging in numbers, rather than solving a problem.

As for memorization from the handbook, I'm not taking any chances. I don't think that the fact that they didn't test it last year affects the probability that it will be tested this year. If it were intended to be background material, I believe that they would have specified it as such on the course description.

sundwarf
04-16-2008, 11:20 AM
I kind of disagree that the purpose of this test is not memorization. In my experience all SOA essay exams are very memorization intensive. Even the calculation problems are more a matter of memorizing the relevant formula and plugging in numbers, rather than solving a problem.

As for memorization from the handbook, I'm not taking any chances. I don't think that the fact that they didn't test it last year affects the probability that it will be tested this year. If it were intended to be background material, I believe that they would have specified it as such on the course description.

This is very close to what I thought as well. Both FET and APM exams are very memorization intensive. APM is a little different I think, because it's useless for me to memorize something that I don't understand -- there is so much stuff that I cannot memorize for this exam until I am at least 75% understand... I was able to get through FET, however, without understanding some of the important concepts...

btw I like your name namssa. I always read backwards.

TiderInsider
04-16-2008, 11:30 AM
It seems like I remember a large question about CMO structures...that was basically a list question and I think it was for 8 points. I'm going to worry about memorizing every list, but I'm also certainly not going to ingore the HB.

Car'a'carn
04-16-2008, 11:42 AM
It seems like I remember a large question about CMO structures...that was basically a list question and I think it was for 8 points. I'm going to worry about memorizing every list, but I'm also certainly not going to ingore the HB.

Are you sure that was not on Exam 6? :wink: I agree though some memorization from HOFIS is needed just in case.

The Smokin' Cracktuary
04-16-2008, 01:06 PM
I suppose in the end it is among the easier of stuff to memorize, so it's not a huge deal. But there is a ton of it. My notecard stack practically doubled when I added that section.

It doesn't hurt that a lot of it is of the more interesting material on the exam.

TiderInsider
04-16-2008, 01:07 PM
Now that I've posted the question, I think you could get a lot of the 8 points just by understanding some PAC basics.

(8 points) You are the Chief Actuary of a company that is writing GICs with 2-, 4-, and 6-year maturities. One of your actuarial students has recommended the use of PACs as an asset class to back the liabilities. You will need to evaluate the appropriateness of this
recommendation.
(a) Describe the features of PAC tranche CMOs.
(b) Explain how the market value of PAC tranche CMOs is affected by whether the
bonds are bought at a premium or discount.
(c) Distinguish PACs from MBS passthroughs.
(d) Describe in detail prepayment behavior considerations.
(e) Describe the specific PAC features you would find desirable for minimizing risk
of the GIC product line.
(f) Outline how you will keep future actuarial students from speaking to you directly

examwritter
04-16-2008, 01:35 PM
How many times in a day you guys check the forum? lol.....its my third time today already .....

Should I focus all my energy on memorizing the list now???

The Smokin' Cracktuary
04-16-2008, 02:15 PM
Now that I've posted the question, I think you could get a lot of the 8 points just by understanding some PAC basics.

(8 points) You are the Chief Actuary of a company that is writing GICs with 2-, 4-, and 6-year maturities. One of your actuarial students has recommended the use of PACs as an asset class to back the liabilities. You will need to evaluate the appropriateness of this
recommendation.
(a) Describe the features of PAC tranche CMOs.
(b) Explain how the market value of PAC tranche CMOs is affected by whether the
bonds are bought at a premium or discount.
(c) Distinguish PACs from MBS passthroughs.
(d) Describe in detail prepayment behavior considerations.
(e) Describe the specific PAC features you would find desirable for minimizing risk
of the GIC product line.
(f) Outline how you will keep future actuarial students from speaking to you directly

Dude, of all of these the only one i actually know is (f). I should be studying.


How many times in a day you guys check the forum? lol.....its my third time today already .....

Should I focus all my energy on memorizing the list now???

I have been checking several times a day, but my life right now is consumed by this exam and no one else I know is taking it. This is my only discussion outlet.

I would never focus all your energy on any one thing, ever.

Knowing lists = 20%-25% of the exam,
Calculations = 20%-25%
Understanding = the rest

You should spend your time according to that.

Of course there are a few things that may distort that.

A.) while lists may only be 25%, you don't know lists they'll ask. And, If you know them, easy points. So that may increase your time spent on that part.

B.) While calc questions are 25% of the exam, you can get a great deal of points just by understanding the idea and explaining the calc without actually doing it. And if you don't understand, but know the part of the syllabus, you can look up formulas and still get a decent amount of points. Basicallly, you could get almost all the calc points without ever touching a calculator. That may suggest spending less time on this, and adding more on general understanding studying.

In any case, I think the idea is to stay fresh on everything, never devout a 100% of your time to anything, because in truth, you need it all to pass. More just split your time between the three areas of studying in proportions to point value on the exam. But on a short time scale. In other words, distrubute study time between the three by days at most, hours preferebly, and certainly not weeks.

Of course, this is all JMO.