Actuarial Career Preparation
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What is an Actuary?
This is from the BeAnActuary website web
site:
What is an Actuary? You may not be familiar with the
term "actuary," but if you work, pay taxes, have a Social Security
number, or have health, life, home, renters', or car insurance, you
depend on the work they do.
The site will provide much more information
Recommended Program
A typical preparation for an actuarial career is a bachelor's
degree in mathematics supplemented by appropriate business courses
or economics courses. At Rose-Hulman a math major or XX/MA major
with an economics minor or, an MA/EC or EC/MA double major
would be a very solid preparation, especially given Rose-Hulman's
emphasis on problem solving throughout all of its degree programs.
Because an actuary makes extensive use of statistics, the statistics
concentration would be a very good choice for the mathematics
program concentration (see math
portion of catalogue). For further information go to the double
majors, economics
major, or economics
minor pages. With a little planning MA/EC or EC/MA degree
can be obtained without overloads or advanced placement. For
the economics courses you should discuss them with the economics
area minor advisor.
Typically, a high GPA is expected for an actuarial career.
Actuarial Exams
Actuaries have an extensive set of
exams which they need to complete to progress through their career.
The first few of these exams cover topics in mathematics and
economics. Passing one and especially two exams (combined with a
solid GPA) before graduation demonstrates the level of
competence and commitment that employers seek in their best
candidates. Furthermore, a good GPA and the first exam give a
student an advantage in securing a summer actuarial internship.
With careful planning a student should be able to complete the
first exam in the junior year and complete both exams before
graduation.
The exams are written in the November and May of each each year.
You must register and pay the fee in advance (Oct 1 and April 1),
so plan ahead. All details and forms may be found at the Society of Actuaries
site or this simpler
page on the BeAnActuary site. You can prepare for the
exams by taking mathematics and economics courses as part of a
mathematics major and economics minor in the normal sequence
as in the following table. In addition it is recommended that you
also prepare for the exam by working through one or two practice
exams. Exam 1 covers Calculus and Probability. A student, moving at
an aggressive pace, should be ready for Exam 1 by the end of the
sophomore year or the November exam in the fall of the junior year.
Exam 2 covers microeconomics, macroeconomics, the theory of
interest and finance and uses the methods of calculus. You
should be able to finish the preparatory course work for Exam 2 by
the end of the junior year, leaving a full year to complete the
exam. A student with advanced placement can accelerate the process
a little.
In the table below, the courses in boldface are courses that
specifically prepare the student for Exam 1, those in bold italics
for Exam 2. Other courses listed are ones that you
might normally be taking as a math or economics major and will give
further practice in problem solving. Check with the economics area
minor advisor for the schedule of the economics courses.
| Quarter |
MA Courses |
ECON Courses |
Actuarial Exam |
| Fall Freshman |
MA111 (Calc I) |
|
|
| Winter Freshman |
MA112 (Calc II) |
SL151 (Intro to Econ) |
|
| Spring Freshman |
MA113 (Calc III) |
SL151 (Intro to Econ) |
|
| Fall Sophomore |
MA221 |
SL355 (Macro) |
|
| Winter Sophomore |
MA222 |
SL351 (Managerial)
SL354 (Micro) |
|
| Spring Sophomore |
MA381 (Probability), MA371 |
SL354 (Micro)
VA352 or VA454 (Finance) |
Exam 1 |
| Fall Junior |
|
SL355 (Macro) |
Exam 1 |
| Winter Junior |
|
SL351 (Managerial)
SL354 (Micro) |
|
| Spring Junior |
|
SL354 (Micro)
VA352 or VA454 (Finance) |
Exam 1, Exam 2 |
| Fall Senior |
|
|
Exam 2 |
| Winter Senior |
|
|
|
| Spring Senior |
|
|
Exam 2 |
Other Courses
Sophomore/Junior/Senior |
|
MG521, SL356 |
|
Study Materials and
Sessions
Certain reference texts and some
supplemental materials, such as practice exams, are recommended for
preparing the actuarial exams. Copies of the recommended texts and
supplemental materials will be kept in the mathematics library. The
actuarial advisor, Dr. Jeffery Leader, and Dr. Dale Bremmer can
provide some help in organizing a study group for students
interested in preparing for an exam. Exam course objectives,
topics lists, recommended readings and sample exams are here:
The topics and recommended reading are abstracted below. Consult
the webpages or library materials for more detail.
Topics for Exam 1
Taken from the Spring 2004 webpage for Exam 1.
- Limits, series, sequences and
functions;
- Derivatives of single and
multivariate functions (maximums, minimums, constrained maximums
and minimums, rate of change);
- Integrals of single and multivariate
functions, simple differential equations;
- Parameterized curves;
- General probability (set functions,
basic axioms, independence);
- Bayes' Theorem;
- Univariate probability distributions
(probabilities, moments, variance, mode, percentiles,
transformations);
- Multivariate probability
distributions (Central Limit Theorem; joint, conditional and
marginal distributions-probabilities, moments, variance,
covariance).
Readings for Exam 1:
Taken from the Spring 2004 webpage for Exam 1.
- Calculus
- Calculus (Seventh Edition),
2002, by Larson, R.E., Hostetler, R.P. and Edwards, B.H.
- Calculus: Concepts and
Contexts (Second Edition), 2001, by Stewart, J.
- Calculus: Graphic, Numerical
and Algebraic , 1999, by Finney, R.L., Demana, F.D. and Waits,
B.K.
- Calculus: Late
Transcendentals (Seventh Edition), 2001, by Anton, H., Bivens,
I. and Davis, S.
- Calculus with Analytic
Geometry (Sixth Edition), 2002, by Edwards, C.H. and Penney,
D.E.
- Probability
- A First Course in
Probability (Sixth Edition), 2001, by Ross, S.M., Chapters
1-8.
- Fundamentals of Probability
(Second Edition), 1999, by Ghahramani, S., Chapters 1-10.
- Probability for Risk
Management , 1999, by Hassett, M. and Stewart, D., Chapters
1-11.
- Probability and Statistical
Inference (Sixth Edition), 2001, by Hogg, R.V. and Tanis,
E.A., Chapters 1-6.
- Probability: The Science of
Uncertainty with Applications to Investments, Insurance and
Engineering 2001, by Bean, M.A., Chapters 1-9.
Topics for Exam 2
Taken from the Spring 2004 webpage for Exam 2.
- Microeconomics
- Macroeconomics
- Interest Theory
- Finance
Readings for Exam 2
Taken from the Spring 2004 webpage for Exam 2.
Selected reading from these texts
- Principles of Corporate
Finance (Seventh Edition), 2002, by Brealey, R.A. and Myers,
S.C., Chapters 1, 4-22, and 29. [Candidates may also use the Sixth
Edition, 2000. Chapters 1, 4-21 and 28.]
- Price Theory and Application (Fifth
Edition), 2002, by Landsburg, S.E., Chapters 1-5, 7-8, 9 (9.3
only), 10-11, and 14.
- Theory of Interest (Second
Edition), 1991, by Kellison, S.G., Chapters 1-3 (exclude 3.6, 3.7,
3.8, 3.10), 4 (exclude 4.8), 5 (exclude 5.8-5.9), 6 (exclude
6.7-6.8), 7 (7.3-7.4 only), and 8 (8.5-8.7 only).
Study Notes
Links
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