More people than usual are attending the May live seminar for exam 4/C, which unfortunately means that the Embassy Suites has sold out of their discounted room block. We have made a list of some other nearby hotels that are relatively inexpensive, which you can find at http://www.theinfiniteactuary.com/files/flyers/AdditionalHotels.pdf
We have prepared an Information Packet with a seminar schedule and list of area restaurants. Some of the key information from the packet is:
You should bring:
The handouts are under the “Live Seminar” tab on the 4/C lessons page.
Monday – Thursday, we will meet from 8-5, with a 1 hour lunch break. On Friday, we will meed from 8-12 to finish the seminar material, and then there will be an optional problem session from 1-3:30 in the afternoon. I will post video solutions to the Friday afternoon practice problems so that those of you who have planned to leave at noon will still benefit from the problems. There will be a short break roughly every hour.
One of the unfortunate realities about actuarial exams is that most people eventually fail at least one exam. What should you do if that happens to you? How should you prepare differently for a second attempt? One of the things that you can do is analyze what happened last sitting and figure out what you need to differently the next time. We have posted a video in the “Before You Begin” section called “You failed, now what?” that we hope will help you form a game plan for your next attempt.
We are very excited to announce the launch of the TIA forum!
In the past, using TIA to study for exams has been a relatively solitary endeavor. You watched the videos, worked the problems, and occasionally emailed your instructor for assistance. If you prefer to learn that way, then don’t worry, you can still do it that way. Think of the forum as an additional (and optional) way to enhance your learning. You might just browse other student’s questions, and decide to give it a try later on.
Although a few TIA members have gone out of their way to interact with others by posting on the Actuarial Outpost or other public forums, the TIA forum makes it incredibly easy for all of us to interact with other members. Any time you have a question or a topic for discussion, you can immediately enter the subject forum and make your post. Everyone else that is subscribed to the seminar will see that there is a new post in that subject forum, and can respond immediately, seconding or answering your topic. Watch the short video posted in the “Before you begin” section of the course to see how the forum works.
Making your experience at TIA more interactive will result in much more powerful and effective learning. But another terrific aspect of the forum is that it will act as a growing and changing knowledge base of answered questions. As your instructor, I’ve found that I answer the same question by email many times. The forum will allow me to post answers to questions in a way that will remain readily available to all seminar users. After a while, you’ll find answers to many of your questions instantly in the forum, instead of needing an email response.
But the forums aren’t just for my answers to questions. As you probably know, there is no better way to test your knowledge than to try to answer the questions that other learners ask. You should try to answer the questions that other members post as often as you can. Other members can chime in to ask more about your answer too, and I’ll be keeping an eye on things to make sure that all the questions receive accurate and useful responses.
As always, we want your learning experience here at TIA to be a positive one. When interacting with each other on the web, please be sure to maintain a cheerful attitude and encourage your fellow learners. Feel free to immediately flag any post that you feel would discourage anyone from interacting.
The forum is open now, so go ahead and watch the introduction video and get started! You could start by introducing yourself in the “Before you begin” subject forum.
Since I’m not doing a live seminar for the October 2011 sitting, I have temporarily added a copy of the live seminar notes and problems to the online seminar. I cover the material slightly differently in the live seminar, with the most obvious difference being that I break what is Section A in the online seminar into two halves, one of which is at the start of the notes (Loss Models pt I) and the other is at the end of the notes (Loss Models pt II). The second piece is stuff that is more self-contained and not really needed for any of the other topics (and some of it is material that is unlikely to be tested, such as discretization).
A less obvious difference is that some of the explanations are somewhat different (better?) in the live seminar notes. In particular, there are some timeline pictures in the discussion of risk sets for B.2 in the live notes that might be helpful to look at. Otherwise, the live seminar notes tend to be shorter and might therefore be useful when reviewing.
Update: I’m currently revising the notes for the 2012 seminar. The new notes will be available on the “Live Seminar” tab for those of you coming to Chicago in August and will feature more problems plus some improvements (at least, I think they are improvements) to a few topics such as Bayesian credibility.
Another common question that people have is how to figure out what to use for n when figuring out the credibility factor Z with Bühlmann (or more often either empirical or Bühlmann-Straub questions as that is where it gets trickier). There are a couple of things that you can keep in mind. One is that the value for n that you use in finding Z is the same as the denominator that you use in finding X-bar for the insured whose credibility you care about. I mention that since typically people are okay in finding X-bar (or X_A – bar in the empirical case) and it is the same logic as for n.
The other thing that you can look for is that n is the number of exposure units, or if you prefer, units of data, that you have. For example, in D.2 # 17 we are told that the number of claims per month for one insured has a Poisson distribution, so one unit of data is what happens to one person in one month. In the first month of our data, we have 100 insureds, so that is 100 data points for that month, etc., and that is why our n is 100 + 150 + 200.
For comparison, in D.2 #14, we are given that the claim size X has a certain distribution, and want the expected value of the next claim. That means we are looking at one unit of data = one claim, and our n = # of claims.
In order for n to be the number of months in #17, we would need to either have our data be for one single insured, so one month = one month for one insured = one data point, or we would need to change the description of the number of claims to only refer to the number of claims in a month. For example, we could say “The number of claims incurred in a month by a policyholder is … ” and then have our data be “The observed data for one policyholder is … ”
One hint that you can use in the problems is that they will almost always use the phrasing Bühlmann credibility when n is the number of years (or months) of data, or the number of claims. They will usually call it Bühlmann-Straub when we are in a case like #17 in which the number of data points per month varies (usually by varying either the number of insureds, as done here, or by varying the group size), and in that case typically your n will be the sum over all the months (or years) of the number of insureds (or number of people in the group).
Taking a peak at an empirical example, in D.2 #32, we want the estimate of the claim frequency per vehicle for Insured A in year 4. Since it says “per vehicle” then one exposure unit = one vehicle for one year. We are making an estimate for Insured A, so we only care about that insured for our n, and have 2 vehicles (=2 exposures) in the first year, 2 in the second, and 1 in the third for an n of 2 + 2 + 1 = 5.
One of the standard questions that people have is when to use the empirical variance [1/n]*sum[(X_i - X-bar)^2] (aka biased estimate of the variance) versus the unbiased estimate [1/(n-1)]* sum[ (X_i - X-bar)^2].
Essentially the idea is that we want to use the empirical (biased) variance whenever the empirical distribution is the key to our definitions. That happens when we are using the method of moments estimate or when we are using the bootstrap method, as both are defined in terms of the empirical distribution. It also happens if we are in a case in which the MLE = MoM estimate of the variance, which happens for a normal distribution. Those are the main cases in which we want the empirical variance.
We want to use the unbiased estimate when we are doing anything with credibility theory, or simulation material other than the bootstrap method.
Those are the main situations in which we are estimating the variance on the exam. Other cases are less clearly spelled out in the text, so when they do appear on the exam it tends not to matter which you use. For example, that has been the case in old questions in which you are asked to choose between (a, b, 0) distributions by comparing the mean and variance. Still, when in doubt it I would tend to use the unbiased estimate.
As the live seminar is fast approaching, I briefly wanted to let you know what to expect and bring to the live seminar. Also, I will be out of the country for the week prior to the live seminar, so if you have questions you need to either get them to me by 3/18 or wait until the seminar itself. You can also find a handout (Live_Seminar_Packet_4C) with much of this information.
You should bring:
To download the handouts, first login, navigate to the live seminar page, and then expand the “Handouts to Bring to Seminar” section. Clicking the green arrows will let you download the handouts.
If you think you will have the energy to do work at night, you can also bring what is labeled as “Problem Set 1″ in the live seminar section. These are the end of section problems from the online seminar, so they are sorted by topic and you can work on them in the evening. Not everyone chooses to do this and many people prefer to relax in the evening instead.
We will meet from 8-5 M-Th, with a 1 hour lunch break, and from 8-11:30 on Friday. There will be a short break roughly every hour. We have to be out of the room by 5 each afternoon, so I will try to end around 4:45 so I can be available for questions afterwards.
I’ve posted typed solutions to the new review problems (209-240). A couple of them are on the terse side and might be expanded later.
I’ve also made some minor changes to the problems that probably aren’t worth re-printing: on #212, I changed the notation for the aggregate loss variable from X to S, on #229 I spelled out more explicitly that n=# of data points, and on #239 I clarified that we are using the MoM for the standard parameters for a zero-modified geometric (this is important as the method of moments estimate is affected by what parameterization you use, unlike the much nicer MLE, but the parameters that I am using are probably the ones you would have guessed to use).
I’ve added one short lesson and about 40 problems to the seminar. The new lesson (A.2.8) is on frailty models, which is a relatively rarely tested topic that has started to come up recently on the exam. There are also a couple of new problems in A.2 related to frailty models. In addition, I’ve added 32 more review problems, as well as some problems to A.1, A.2, A.3, B2, C2, and C3. Some of the new end of section problems are on topics that are newish to the syllabus and also show up in the new review problems. For example, I’ve added a number of questions on (a,b,1) distributions (in particular, finding MLEs and MoM estimates), and there are some of those in both the new C.3 problems and the new review problems.
If you are taking the exam in February and are relatively low on study time, I would still recommend looking at the new review problems and the new lesson, but the other new problems are somewhat redundant with the new review problems and can be skipped.
In addition to the sections with new problems, all of the problem sets and solutions are flagged as updated. The reason for that is that I have made some cosmetic changes to all of the typed solutions, plus re-compiled the solutions to make sure that all of the typos that have been fixed on my computer are also fixed on the website. Other than the six sections with new problems (A1, A2, A3, B2, C2, C3), these changes are minor enough that I wouldn’t recommend printing new copies of the problem sets/solutions.
Edit: The new review problems also include essentially all of the SOA 289 problems that were previously missing from either the end of section problems or other review problems. There are still 1 or 2 problems from the SOA sample problems that I don’t include because they are old exam M problems that use life contingency notation that is not on the 4/C syllabus and I haven’t yet figured out a good way to rephrase them to make them relevant for the our exam.