TIA’s Exam 2/FM Blog

Here is what I would do the two days before the exam:

http://theinfiniteactuary.com/blogs/exam2/?p=46 

Please see the following post for some test taking tips:

http://theinfiniteactuary.com/blogs/exam2/?p=43

In lesson B.3.1 the following relationship:

 long position + purchased put = call option + borrow pv strike price

 Should be:

 long position + purchased put = call option + lend pv strike price

Which makes complete sense b/c when you enter into a long position you pay money now (to buy the asset) and get money later (when you sell the asset), which is like lending money (pay money now and get money later).  A similar understanding yields:

 short position + purchased call = purchased put + borrow pv strike price

Since in a short position you get money now (from the short sale) and pay money later (when close the position), which the just like borrowing money (get money now and pay it back later).

In the solutions to A.6.4 Problems to find the first and second derivative of the assets and liabilities I took the derivative with respect to v when I should have taken the derivative with respect to y (the yield rate).  I’ve corrected the solutions.

I’ve had some issues with my email over the last week.  So if you emailed me and didn’t get a response, then please resend.  Sorry.

At the end of the pyramid lesson I solve problem 106.  A student sent me a better solution.  The key thing to notice is the difference between the 12-year annuity and the 11-year annuity is just a level payment of 1 for 6 years.  So the present-value of the 12 year annuity equals the present-value of the 11 year annuity plus a-angle-6.  We find a-angle-6 = 5 just like I did in the lesson, then the present value of the 12-year annuity = 25 + 5 = 30.

My suggested study schedule is now available.

Spring 2008 Suggested Study Schedule

I’m still waiting on word from the SOA for the exam date.  After I get that date, then I’ll post a suggested study schedule.

See the following contest for a chance to win an iPod Touch:

 http://theinfiniteactuary.com/?page=marketing

I want to wish everyone good luck tomorrow!

If you can think of anything that would improve the online seminar, then please let me know.  Any feedback is greatly appreciated (positive or negative)?