Online Exam: College

Actuaries in the U.S., Canada and other parts of the world earn professional credentials by passing a series of examinations. This Online Exam is designed to give you an idea of the types of questions you might encounter on the preliminary actuarial examinations administered by the Casualty Actuarial Society and Society of Actuaries. Please be sure to review the Actuarial Exams section of the Web Site, where you can access complete sample actuarial exams.

Answer the five multiple choice questions below, then click submit to see your results. If you are a high school student, please take our High School version of the Online Exam.

Sales, S, of a new insurance product are dependent upon the labor, L, of the sales force and the amount of advertising, A, for the product. The relationship can be modeled by

Which of the following statements is true?

	A. S increases at an increasing rate as L increases, and increases at a decreasing rate as A increases.
	B. S increases at an increasing rate as L increases, and increases at an increasing rate as A increases.
	C. S increases at a decreasing rate as L increases, and increases at a decreasing rate as A increases.
	D. S increases at a decreasing rate as L increases, and increases at an increasing rate as A increases.
	E. S increases at a constant rate as L increases, and increases at a constant rate as A increases.

The telephone numbers in a certain area all start with 4 and then 3. The third digit can be 7,8, or 9. Each of the last four digits can be any number from 0 to 9. There are 28,243 telephone numbers assigned in the area. How many phone numbers are still unassigned?

	A. 28,243
	B. 30,000
	C. 331,757
	D. 1,757
	E. None

The claim amount on a certain insurance contract has a normal distribution with mean $3,300 and standard deviation $575. Given 25 independent claims, what is the probability that the number of claims less than $2700 is less than or equal to 4?

	A. 0.26
	B. 0.45
	C. 0.5
	D. 0.69
	E. 0.82

An insurance company issues policies to two groups of insured A and B. For a certain type of coverage, the number of claims per year for each group follows the Poisson distribution

For group A, = 1, and for group B, = 1.5.

If in calendar year 2003, 2/5 of this company's policyholders are of group A, what is the probability that the combined number of claims from both groups is no more that two.

	A. 0.627
	B. 0.857
	C. 0.544
	D. 0.287
	E. 0.879

In calendar year 2002 the claim costs for a particular coverage follow an unspecified distribution with mean equal to $5,000 and variance equal to $2,000,000. Assume that claim cost inflation is 5 percent per year.

Calculate the standard deviation of claim costs in 2004 rounded to the nearest dollar.

	A. $1,485
	B. $1,449
	C. $1,559
	D. $4,696
	E. $5,250