In the future a common theme for this blog will be the 9 exams one must take to become a certified actuary. I am currently preparing for number 2 (I haven't taken 1 yet - that's for next year). The second exam is about interest and introductory financial math (i.e. really weird schemes to try to make money... like derivities, and swaps, and who knows what else!).
My professor has supplied my class with 5 past exams. Now, in 2003 they changed the exam so many of the questions are unaplicable, but it is all still quite helpful. Like a true student actuary I made an excel table which has a box for me to check when I successfully answer each question, and also a little formula which calculates how many I've done. Right now I'm 2% way through, after answering 4 questions correctly. I don't know how to do the other 98% yet, but I still have 11.5 weeks of class left... My favorite one so far:
Mike receives cash flows of 100 today, 200 in one year, and 100 in two years. The
present value of these cash flows is 364.46 at an annual effective rate of interest i.
Calculate i.
The answer is about 13%.
A short side comment: it's interesting to note the names the exam uses: Mike, Bruce, Robbie. Not these PC names I'm used to seeing in text books. The world became a considerably weirder place when text books decided it was neccessary to have a Jamal and Carlos in every problem. I digress...
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2 comments:
It's like when I went to Hackenmeuller's and they had names like Him, Donna, and Gordo. They should really get a Theophilus in these exams.
Jim*
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