Actuarial Career Preparation
The information on the page is out of date and will be updated shortly.
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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