Preview Questions Actuary | Role Specific Skill

Question 1: The Kolmogorov-Smirnov test is typically used in actuarial analysis for:

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Comparing the means of two independent groups

Testing the correlation between two variables

Estimating the mean and variance of a dataset

Testing if a sample follows a particular distribution

Question 2: When calculating the loss development factor for an insurance portfolio, which statistical approach is most often used to model the development of reserves over time?

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Maximum Likelihood Estimation

Chain-Ladder Method

Bayesian Inference

Generalized Linear Model (GLM)

Question 3: Which technique is most effective for reducing multicollinearity in multiple linear regression models used in actuarial financial modeling?

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Applying Ridge Regression

Using Principal Component Analysis (PCA)

Removing all interaction terms

Increasing the number of predictor variables

Question 4: What does the European Insurance and Occupational Pensions Authority (EIOPA) primarily regulate under Solvency II?

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Risk-based capital requirements

International accounting standards

Interest rate risk for investments

Foreign exchange rate adjustments

Question 5: How do you assess "Model Risk" in actuarial models, and what strategies do you employ to mitigate errors in model assumptions or predictions?

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Model risk can be ignored as long as the model is validated once

Model risk is irrelevant as models always produce accurate results

Model risk arises from errors in model assumptions or prediction accuracy, and it is mitigated by performing sensitivity analysis, backtesting, and using model validation techniques

Model risk is only relevant in regulatory compliance and not in day-to-day operations

Question 6: What is the primary objective when conducting a value-at-risk (VaR) analysis for a financial institution?

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To measure the potential loss under adverse market conditions

To calculate the interest rate risk in the portfolio

To determine the expected growth of the portfolio over a given period

To calculate the average return of the portfolio