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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
  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


This document was last modified: 03/02/2008
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