May 2007

[Hermann]

I heard the news that Exam M is going through a massive restructuring in May of 2007 where it will be made to be 5 hours long. Is Exam 3 going to change in a similar way?

[Gandalf]

Exam M may be changing. At least the initial proposals for changing M would involve moving the Loss Models material to C. If the CAS wants to keep C joint, they probably won't want to have the Loss Models material on both C and 3, even if they are not interested in adding the Financial Economics material to 3.

It is not definite that either M or C is changing. It is only a proposal.

[Abraham Weishaus]

I just returned from the New York SOA meeting. Professor Klugman said the board had approved the proposal.

[Colymbosathon ecplecticos]

Could somebody please explain to me how this works? The SoA Board votes on a resolution and mandates changes to a joint exam? Is the CAS consulted? Is their board asked to vote or opine?

[Gandalf]

This is the SOA Board that mandated maximum passmarks on exams that were created as joint exams.

This seems more within their power, as their action is really defining the SOA exam and the CAS can decide whether such an exam, more than a year from today, will be joint. I sure hope they consulted the CAS about the implications for C and considered the CAS thoughts, but if the Boards couldn't live with a common exam (as they decided they couldn't with M/3), then they need to meet their educational/qualification needs separately.

I sure hope they consulted the CAS; I sure wouldn't bet that they did.

[Abraham Weishaus]

The CAS was consulted. Perhaps a member of the CAS could tell us what they have in mind.

[The Mantastic Actuary]

I emailed the CAS for this question (on a different thread)

Here is their response:

Thank you for your inquiry. The CAS will continue to jointly sponsor Exam
4/C next year and will make the same changes.

If you have other questions, please let me know.

Sincerely,
Thomas Downey
Director of Admissions
Casualty Actuarial Society

[Selena]

So the question now is whether we should take exam C this fall or next spring. With loss models added to the syllabus in 2007 it may be smarter to wait until next spring then and take some other exam this fall. What do you guys think?

[The Mantastic Actuary]

I would say take what you feel prepared for. I have been working for only a year now, I don't think I am ready for exam 6 (reserving and such) or 9 (something that probably is really hard thats why it is the last exam).

I see it as take 4, if I do not pass then the new version will have some stuff I got on 3

[AdoubledotAngleN]

This is a huge mess. I really don't like how they keep changing exams. Do you want Brownian motion or not? Make up your mind! I agree that they should add some Monte Carlo, but they should have done it when they made the FM, M and C changes a few sittings ago.

Which brings me to another point. What's this crap with letter names for exams. I almost registered for the wrong exam. AHHHHHH!

I love actuarial science and I don't really mind taking exams that much, but this crap is making me question if I want to keep taking these tests. I've been doing well on the tests, and I could easily take my skills elsewhere. The changes probably won't even affect me and it still makes me angry. If I have to be tested on loss models again I'm looking for a new career. Not that I hate loss models, but I already think I passed a loss models exam and I feel like its a major kick in the pants.

Maybe I'm the only one that feels like this...

[The Mantastic Actuary]

retesting it could mean free points for people who know loss models :tup:

[Hermann]

I emailed the CAS for this question (on a different thread)

Thank you for your inquiry. The CAS will continue to jointly sponsor Exam
4/C next year and will make the same changes.



It is not clear whether he is talking just about 4 or both 3 and 4. It would be helpful if he explicitly said that the CAS is making Exam 3 five hours long and included a link to the material on it. Course M and Exam 3 differ slightly right now so we cannot assume the new Exam 3 will be the same as the new Course M. All I can hope is 47.5 (I got one more right than I previously thought due to checking the answer key carelessly) is enough to pass this sitting. I do not like these changes.

[The Mantastic Actuary]

All I can hope is 47.5 (I got one more right than I previously thought due to checking the answer key carelessly) is enough to pass this sitting.

I hope you pass too, b/c if you pass that means my score will also pass

[Gandalf]

I don't think there is any chance that CAS 3 will be the same as SOA M. The CAS wanted to test statistics, and didn't want to test the life material in as great detail. How would either of those have changed?

Will the CAS change anything? Probably. It would be strange for them to test the non-life material on 3 and 4. They might decide they need to add some financial economics material to prepare CAS candidates for the financial economics material on 4.

I could be wrong.

[The Mantastic Actuary]

Is there financial economics on 4? The SOA is putting financial economics as a the other part of their new M

[Gandalf]

This post discussed the SOA redesign. (http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?p=1525649#post1525649) The financial economics is mostly on M, but not solely on M.

That post contains a link to the revised syllabus for FM, M and C. Here's a summary of the changes
Exam FM/2:
• Add an introduction to financial derivatives, (forwards, options, futures, swaps) and their use in risk management.
• Add an introduction to the concept of no-arbitrage as a fundamental concept in financial mathematics.
• To accommodate the additional material, expand Exam FM/2 to a 2.5-hour multiple-choice examination.

Exam M:
• Add learning outcomes on option pricing: put-call parity, the binomial model, and Black-Scholes formula. A study note introducing actuarial applications of option pricing.
• Add learning outcomes on interpretation of option Greeks and delta-hedging
• Add learning outcomes on the features of exotic options.
• Add an introduction to Brownian motion and Itô’s lemma.
• To accommodate the additional material, move loss models, including risk theory, to Exam C/4.
• Given the relative increase in the amount of material, expand Exam M to a 5-hour multiple-choice examination.

Exam C/4:
• Add lognormal models for asset prices and its relationship to the Black-Scholes formula.
• Include Monte-Carlo valuation of derivative securities with the current material on simulation
• Add characteristics and calculation of risk measures such as value at risk and conditional tail expectation.
• Add the loss models and risk theory material moved from Exam M.
• Remove interpolation and smoothing (splines).
• The exam will remain a 4-hour multiple choice examination

The link includes the textbooks and chapter references. All three exams use a book called Derivatives Markets. Course C gets chapters 18 and 19 of it. If those chapters depend on earlier chapters, then CAS people need to know something about the early chapters, not necessarily at a "pass a test" level. Note the "if": I have no idea whether chapters 18 and 19 depend on anything earlier.

[Bühlmann]

retesting it could mean free points for people who know loss models :tup:

While that is fine and dandy, it still means wasted time (taking a test over stuff you learned on a previous passed exam).
I think all of these changes are nauseating. 2007 will have major changes even though there were major changes already made.
Although I think many of the changes have been steps in the right direction, I question major change after change after change. Our exam program will be changing again. Raises will be shuffled again. Study time will be shuffled again.

[Howard Mahler]

Not this helps, but when I asked a few weeks ago, I could get no information on what the CAS 3 will look like in 2007.
I was told I would be able to find out in June.
Since this was OK for me, other than curiosity, I did not pursue it any further.

Howard

P.S. One should not assume anything based on this absense of information.

[PANIC]

Anyone interested in filing a class-action lawsuit?

[TRINIDON2K]

damnit...i'm graduating in a week and some of these things that they are adding i've never even heard of....i wish they proposed these changes 4 years in advance

[Colymbosathon ecplecticos]

Anyone interested in filing a class-action lawsuit?

I am curious, whom do you plan to sue and what tort are you alleging?

[The Mantastic Actuary]

damnit...i'm graduating in a week and some of these things that they are adding i've never even heard of....i wish they proposed these changes 4 years in advance

You are not supposed to know everything from classes at your University. I went to a school as a math (theoretical, not applied) and biology double major. Most of the stuff I see here I never saw before, but you should be able to learn yourself. IF we saw everything we do before we graduated what would the point be of the exams?

[TRINIDON2K]

You are not supposed to know everything from classes at your University. I went to a school as a math (theoretical, not applied) and biology double major. Most of the stuff I see here I never saw before, but you should be able to learn yourself. IF we saw everything we do before we graduated what would the point be of the exams?

well my major was actuarial science and our curr. was supposed to prepare us for the first 4 exams....i think it could have done this if we knew about these changes a few years ago....watever...i'll adjust