Fulfill VEE Requirements

Updated: 15 July 2008

Introduction
How to Get VEE Credit
VEE-Applied Statistical Methods
VEE-Corporate Finance
VEE-Economics

Introduction

The CAS, CIA, and SOA Validation by Educational Experience (VEE) topics consist of the following subjects:

Economics
Corporate Finance
Applied Statistical Methods.

These topics are not tested on the preliminary exams, but are required in addition to the preliminary exams. NOTE: VEE topics are not prerequisites for the preliminary examinations. They need not be completed prior to writing any of the preliminary exams and may be fulfilled independently of the preliminary exam process.

In addition to the preliminary education requirements listed above, each society has additional educational requirements for membership. Please visit the Web sites of the three societies for additional information. Details about the process for obtaining credit for the VEE topics are provided below. VEE topics are not prerequisites for the preliminary examinations and may be fulfilled independently of the preliminary exam process.

How to Get VEE Credit

College Course(s)
Complete the required VEE approved courses offered by a college or university. Candidates must receive a grade of B– or better in each course unless otherwise noted. Directory of Approved Courses/Experiences
Standardized Examinations and Other Educational Experiences
Achieve the required grade on an approved standardized examination or other educational experience. Standardized Examinations and Other Educational Experiences List

For more information visit the Approved Courses/Experiences for VEE Web page.

Step 1: Approval of Courses/Experiences

The VEE Administration Committee determines which college courses, standardized exams, and other educational experiences are approved for VEE credit. All approved courses/experiences will be listed in the Directory of Approved VEE Courses/Experiences or the Standardized Exams and Other Educational Experiences list available on the CAS, CIA, and SOA Web Sites. Each list identifies the educational institution, the approved courses/experiences by VEE topic, a unique approval code for each course/experience, and the years for which the courses/experiences were approved.

Before a candidate may submit an application to receive individual credit for a VEE topic, the course or educational experience itself must first be approved and listed in the Directory of Approved Courses/Experiences or the Standardized Exams and Other Educational Experiences list. Both lists are found on the Approved Courses/Experiences for VEE Web page.

If a VEE Course/Experience does not appear on either list, approval must be requested by completing a VEE Course Approval Application and submitting it along with the required documentation. The guidelines that the VEE Administration Committee will use to determine whether specific courses or educational experiences are appropriate to fulfill the VEE requirements are provided below Step 2.

Step 2: Approval of Individual VEE Credits for Candidates

The following guidelines for the three Validation by Educational Experience (VEE) requirements are used by the VEE Administration Committee to determine whether or not specific courses or educational experiences are appropriate to fulfill the VEE requirements. The “VEE Candidate Credit Application” must be submitted to the VEE Administration Committee along with the required documentation. If a course/educational experience is approved, it will be added to the “Directory of Approved VEE Courses/Experiences” or the “Standardized Exams and Other Educational Experiences” list.

VEE–Applied Statistical Methods

Courses that meet this requirement may be taught in the mathematics, statistics, or economics department, or in the business school. In economics departments, this course may be called Econometrics. The material could be covered in one course or two. The mathematical sophistication of these courses will vary widely and all levels are intended to be acceptable. Some analysis of real data should be included. Most of the topics listed below should be covered:

Regression analysis

Least square estimates of parameters
Single linear regression
Multiple linear regression
Hypothesis testing and confidence intervals in linear regression models
Testing of models, data analysis and appropriateness of models

Time series/forecasting

Linear time series models
Moving average, autoregressive and/or ARIMA models
Estimation, data analysis and forecasting with time series models
Forecast errors and confidence intervals

VEE–Corporate Finance

The typical corporate finance program covers the topics below in two semesters with an introductory course followed by a more advanced semester. If the second course covers most of the topics, then only the second course will be required. Where the topics are split across two semesters or courses, both will be required. The exceptional case where the corporate finance topics are covered in only one course, with no finance prerequisite, will also be considered, however, this will typically be at a more advanced level than a course designed for general business students.

Most of the topics listed below should be covered:

Definitions of key finance terms: stock company; capital structure
Key finance concepts: financing companies; characteristics and uses of financial instruments; sources of capital; cost of capital; dividend policy; personal and corporate taxation
Factors to be considered by a company when deciding on its capital structure and dividend policy
Impact of financial leverage and long/short term financing policies on capital structure
Characteristics of the principal forms of financial instruments issued or used by companies, and the ways in which they may be issued
How a company's cost of capital relates to the investment projects the company wishes to undertake
Definitions of key finance terms: financial instruments – bond, stock, basic options (calls, puts); dividends; price to earnings ratio
Structure of a stock company and the different methods by which it may be financed
Calculate value of stocks
Measures of financial performance: balance sheet; income statement; statement of cash flows; financial ratios (e.g. leverage, liquidity, profitability, market value ratios); net present value: the payback, discounted payback models; internal rate of return and profitability index models
Assessment of financial performance using various measures: balance sheet; income statement; statement of cash flows, financial ratios (e.g. leverage, liquidity, profitability, market value ratios); net present value; the payback, discounted payback models; internal rate of return and profitability index models

VEE–Economics

Typically, the VEE requirement for economics will be met if a candidate has completed two economics courses, one course covering microeconomics and the other covering macroeconomics. Most of the topics listed below should be covered:

Microeconomics

Interaction between supply and demand in the provision of a product and the way in which equilibrium market prices are determined
Elasticity of demand and supply and the effects on a market of different levels of elasticity
How rational utility maximizing agents make consumption choices
How profit-maximizing firms make short run and long run production choices
Different types of competition, or lack of it, and the practical effect on supply and demand

Macroeconomics

Structure of public sector finances of an industrialized economy
GDP, GNP, and Net National Product. How these concepts are used in describing the economy and in making comparisons between countries, and their limitations
Propensity to save or to consume by the private sector or the corporate sector and how it affects the economy
Impact of fiscal and monetary policy and other forms of government intervention on different aspects of the economy, and in particular on financial markets
Role of exchange rates and international trade in the economy and the meaning of the term balance of payments
Major factors affecting the rate of inflation, the level of interest rates, the exchange rate, the level of unemployment, and the rate of economic growth in the economy of an industrialized country

Frequently Asked Questions