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  #21  
Old 08-06-2017, 04:37 PM
xaznstylegrlx xaznstylegrlx is offline
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Originally Posted by immocardo View Post
I'm on my second attempt. My first attempt I gave a single allocation and I think that's part of the reason I failed.

This time I'm providing a full strategy like they provide, with a different mix depending on market conditions.
Thank you for the insight and good luck!
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  #22  
Old 08-07-2017, 11:06 AM
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I'm on my second attempt. My first attempt I gave a single allocation and I think that's part of the reason I failed.

This time I'm providing a full strategy like they provide, with a different mix depending on market conditions.
If they give an example, it's always a good idea to reproduce it (i.e. give them what they want) in the same way with your suggested portfolio mixes. Just make sure you justify why you changed your asset mix the way you did for the optimistic and adverse market condition strategies.
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  #23  
Old 11-09-2017, 01:04 PM
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Originally Posted by lpsnyder View Post
Did nobody think to use the Cost Per Employed Person on the Model tab (the cost such that the ending fund balance was zero)? I did not think using the average cost on the Results tab was the best idea, but maybe I'm not being conservative enough.
Anyone figure out why the mean cost on Results tab and the goalseek cost on Model tab are not the same? which number did you use for task 2?
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  #24  
Old 11-09-2017, 01:41 PM
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Originally Posted by Actuarized View Post
Anyone figure out why the mean cost on Results tab and the goalseek cost on Model tab are not the same? which number did you use for task 2?
If I remember right, the model tab shows results for one simulation number (ex. simulation 999 of the 1000 simulations run), which didn't seem useful to me.
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  #25  
Old 11-09-2017, 01:57 PM
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Originally Posted by lowexpectations View Post
If I remember right, the model tab shows results for one simulation number (ex. simulation 999 of the 1000 simulations run), which didn't seem useful to me.
That was my understanding as well. Thank you for confirming.
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  #26  
Old 11-09-2017, 02:08 PM
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Can anyone explain to my why the SOA puts out poorly designed workbooks that encourage or require sensitivity testing to be carried out manually and in a way that isnít conducive to peer review? Am I wrong?

This kind of work would not be tolerated in a serious actuarial firm so why is it representing the profession? Why arenít they encouraging obvious best practices in their assignments/assessments?

Actuaries already have a reputation of lacking adequate programming skills and an unfortunate obsession with clunky inefficient excel work. SOA: at least design your workbooks in a way that would allow a candidateís work to be traceable and easily replicated. Itís not an excuse to pretend that youíre training candidates to deal with subpar work here.
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  #27  
Old 11-09-2017, 03:50 PM
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Originally Posted by Z3ta View Post
Can anyone explain to my why the SOA puts out poorly designed workbooks that encourage or require sensitivity testing to be carried out manually and in a way that isnít conducive to peer review? Am I wrong?

This kind of work would not be tolerated in a serious actuarial firm so why is it representing the profession? Why arenít they encouraging obvious best practices in their assignments/assessments?

Actuaries already have a reputation of lacking adequate programming skills and an unfortunate obsession with clunky inefficient excel work. SOA: at least design your workbooks in a way that would allow a candidateís work to be traceable and easily replicated. Itís not an excuse to pretend that youíre training candidates to deal with subpar work here.
You mean you don't love having to manually copy all of your sensitivity test results!? Weird....
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  #28  
Old 11-09-2017, 04:48 PM
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Originally Posted by lowexpectations View Post
You mean you don't love having to manually copy all of your sensitivity test results!? Weird....


No dignified analyst in real life would design something that needs to be manually repopulated either to peer review it or update it when source data/assumptions change. And several workbooks put out in the FAP course appear to encourage/require such amateur design.

It's an especially cruel thing to do when you change the numbers on people for a second attempt
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  #29  
Old 01-23-2018, 03:51 AM
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Originally Posted by actuarialstudent13 View Post
I failed the CDEF FA and my feedback was that Tasks 2 and 3 were the worst.

What was your strategy for selecting your asset mix? In my first attempt, I modeled all the possible mixes in 25% increments and went with the asset mix that minimized the CTE95. I ended up with an allocation of 25% T-bills, 50% Bonds and 25% equities.

I felt pretty good about this at the time (and still do), but I recognize that I'm open to SOA criticism on two fronts: First, 25% increments might be too large. The SOA might claim that I might be missing something. I doubt that narrowing the increments results in a great deal of new information, but the SOA might assert that I haven't tried hard enough here.

Second, allowing equities in the portfolio. Equities are high volatility, and they can't be used to duration match the liability, so the SOA might not want any equities in the portfolio. That having been said, equities reduce the expected payments that taxpayers are going to need to make, and furthermore, as I already mentioned, the model says that this portfolio with equities minimizes the CTE95, so clearly the model is suggesting that this extra risk is worth it. Thoughts?

To set the contribution rate, I took the mean (as a proxy for the median), as I neither wanted to be too conservative (in which case current tax payers would pay more than future tax payers), nor too aggressive (in which case the next generation of tax payers would face a greater burden). I think this was what the SOA really disliked about my Task 2 response. I think that the fact that it would require new legislative action to change the tax rate was hinting to pick a tax rate that was on the conservative side. Any suggestions for how to do this?

I was thinking of using the CTE95 as my risk metric and using the CTE75 as my tax rate. How does that sound? Thoughts? Alternatively, I could take the mean tax rate and add a standard deviation or two.

Thanks for the help. It's appreciated.
The selection of the degree of certainty with CTE and VaR was arbitrary.
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  #30  
Old 01-23-2018, 03:57 AM
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Originally Posted by Amyashi View Post
I did. It didn't make sense to put so little in equity in the context of my FA submission.



Not sure what you mean by "help understand CTE". I think the course explains pretty clearly what CTE is.
Correct me if I am wrong. I remember one of the textbook mentioned something like a typical pension fund invests 60% in equity.....Is that why you allocated higher than 10% for equity in your asset mix?
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