Actuarial Models — MAP 4175-01, CRN 02132, 4 sem. hr.

co-listed with MAP 5177–01, CRN 02134, 3 sem. hr.

Fall 2004

Time: M 2:30 & TR 2:00, 200 LOV; R 5:00-6:30, 204 & 102 LOV


instructor: Dr. Bettye Anne Case
office hours: 209 LOV, TR 3:20-4:30 (also M 3:20 or R1 by e-mail appointment)
email: case@math.fsu.edu


mod044 (this is a .pdf file — .html version is at map41755177f2004mod043.html)

mod043 (this is a .pdf file — .html version is at map41755177f2004mod043.html)

mod042 (this is a .pdf file — .html version is at map41755177f2004mod043.html)

Addendum for Graduate Students

Background for Actuarial Models (this is a .pdf file)

Guide to Actuarial Science at Florida State University


CLASS INFORMATION AND WEBPAGE. Subsequent assignments are numbered mod042, mod043 etc... All of these together constitute the course syllabus. The course webpage which includes major announcements and helpful information is at: map41755177f2004update.html

E-MAIL. Class communications will rely on e-mail to the department alias Ms. Diaguila makes for all actuarial students and/or the official university alias for the class. There will be a test mail the first week. Please check daily for e-mail to both and addresses (if you have both). If you use another account primarily be careful if you set a forward because of spam filters: e.g., “garnet.fsu.edu” mail to forwarded to “aol” may be considered SPAM by their detector and not delivered.

PREREQUISITES. Please complete and hand in at the first class the “Eligibility” form. The official prerequisite for undergraduates is “C–” or better in MAP 4170 and STA 4442. If you are permitted to take 4170 and 4175 together you must have completed the work in the Background for Actuarial Models module by 9/7; it is linked from the course webpage. Please complete the departmental form in Ms. Esther Diaguila's office, 222 LOV during the 2nd week of classes.

MORE ABOUT PROBABILITY. The equivalent of FSU's STA 4322 (Math Stat) is needed before the Bowers book, and for parts of the “P”, “M” or “CAS 3” exams. To assure timely graduation, many in this class will not have had that much mathematical statistics and some may still be in STA 4442 (note this on the first-day Eligibility form). Thus in class we will try not to use sophisticated statistical notation any more than essential — our probability will be somewhat sloppy; be warned that the actuarial examinations will require more knowledge and care.

COURSE MATERIALS. All students bring to class each day Vol I., 2001 or later Vol I ACTEX Course 3 by Michael A. Gauger. I will give out copies of the first pages to get you through a week or so, but you should order this immediately, see below. (Do not try to share this text. Do not work from copied pages past I-1 or you and FSU could be in violation of copyright.) Also you need in class each day the TI BA–35–Solar Calculator or other exam-approved calculator to use in class discussion. Undergraduates must also have ACTEX 1-Pack or 2-Pack depending on which exam you are taking next.

There are two supplementary texts: (1) Bowers Actuarial Mathematics text listed on the SOA and CAS Course/Exam 3 official syllabi will be helpful to you and I supplement from it in class; FSAS who concentrate on preparing students for exams tell me they consider Bowers “too” difficult for students first studying the material and advise using Gauger or another manual. Bowers is very expensive but if you can afford it, you should have it. (2) Cunningham, Herzog and London Models for Quantifying Risk, to appear 2005, preliminary edition ACTEX Publications, will also be a course reference and supplement.

You must have exam prep material at the level of ACTEX exam 1-Pack or exam 2-Pack depending on which exam you are preparing.

All of the above books are available from online booksellers and directly from Actex Publishers, call 800-282-2839. They normally only sell Vol. I in the whole package for the Course 3 Exam, but they have told me they will sell you just Vol. I if you tell them you are “Dr. Case's student at FSU and Mary Liz said they could buy just Vol. I.” www.actexmadriver.com

COURSE GOALS, OBJECTIVES AND CONTENT. In this course, the students will develop understanding and knowledge of actuarial survival and contingency models useful for future applications and research in actuarial science or related areas or in preparing for actuarial credentialing. Though framed in terms of human lives, this theory is equally applicable to the design of a machine, computer software or a bridge... and is useful in a wide range of educational, business and government problems as well as in the computing the actuarial basis of various insurance products. They will achieve this goal studying the content and working problems based on Vol. I, Gauger, Course 3, and notes from supplemental sources. Students in this course will become familiar with material and study methods to assist their future preparation for the SOA 3 or M, or the CAS 3, exam. In this course a very high level of mastery is expected of the earlier units (Section I and Section II Units 1–4); the latter units (II–5&6) are tested in the detail for which time permits coverage to provide a good start toward future mastery. Students will state, understand and apply the definitions, relationships, and notation of actuarial survival and contingency models and will apply this information to solve problems related to those on the exams as provided in the text and supplemental notes (see also “GRADING” and “ABOUT YOUR TEXT” BELOW). Secondary objectives include preparing for and if appropriate taking (and hopefully passing) an Actuarial Exam, polishing written and verbal presentations of technical material and corollary skills, use of the internet to obtain and give information, and other knowledge and skills needed for an actuarial-related career in the financial sector, government or academia.

See “PROFESSIONALISM”, “GRADING” and “ABOUT YOUR TEXT” for further description of these aspects of the course goals and objectives.

PROFESSIONALISM. You are encouraged to enhance skills needed for professional development through graded activities. Near the end of the term you will prepare a Brief (Executive Summary) describing your individual activities and improvement in this category. Some examples of these skills and related graded activities: Practicing by class and written presentations essential communication skills; seeking out career information through speakers visiting campus (FSSAS) and otherwise as well as written (library, internet) information; developing and following a good plan for your personal exam progress; timely completion of all course assignments; attendance at every class and Study Group meeting, class participation and attendance at FSSAS and other announced activities; participation in exam Study Groups, including acting as a leader; completing a proper-form Resume which can be put on the internet in the departmental Resume book; and other assignments and activities to be announced. Note below that 100 points of your cumulative class points will subjectively evaluate your performance on these aspects of your developing “Professionalism”.

ACTUARIAL EXAMINATION PREPARATION AND REGISTRATION.

The actuarial credentialing exams are changing rather drastically for 2005. To learn about upcoming revisions, see http://www.soa.org/ccm/content/exams-education-jobs/education-redesign/pe-syllabus-announcement/.

Even so, you need to have passed one and need two to be an attractive competititor in the job market. As part of the “Professional Development” grade in this course, you must demonstrate by practice exam scores and group participation that you have prepared for an exam, whether or not you take one Nov. '04. Preparing for an exam is part of the course grade so you will be given some class days to work in groups; be warned that absence on a Study Group day will negatively affect your “Professionalism” component grade as will absence from sessions out of class agreed on by the group. Group study for actuarial exams is a long tradition currently practiced e.g., in large consulting and insurance firms. Undergraduates must participate in an assigned study group during Sept. and Oct. whether or not taking a Nov. '04 exam. Hopefully you will have the opportunity to be a group leader for part of the term; leaders report on their group's progress for that period.

See www.soa.org, http://www.casact.org/ and/or www.beanactuary.org) to register for a November exam.

Report in class on Thurs. 9/2, which exam you will prepare and/or take, and study groups will be assigned 9/7 on mod042.

EXAM MENTORS; TUTORIAL ROOM. Mr. Ken Hill, a graduate student in Financial Mathematics, is assigned as a graduate Teaching Assistant to the actuarial and financial programs; he keeps the records of attendance and performance for MAT 4930, the Actuarial Tutorial. Ms. Kelsey O'Brien and and Mr. R. J. Egnor are undergrauate tutors for the tutorials and log and report performance to Mr. Hill (hence to Dr. Paris, who is the MAT 4930 professor of record) for students preparing for exams. All three are students in this class and will have no part in the grading of this class. They will sit in on some of your Study Group sessions and will be available to help you with specific concepts; thus their own “Professionalism” component grade will be on the factors other than Study Group participation. Whether or not you are registered for the tutorial MAP 4930, they are available in the tutorial room (MCH 112) to help you study for actuarial exams. The schedule will be announced by e-mail to the actuarial student alias and on mod042.

PI MU EPSILON HONOR SOCIETY. If you are an undergraduate with a good (>3.1) GPA see Ms. Esther Diaguila, 222 LOV, in November about having your class rank checked to see if you qualify for the Pi Mu Epsilon historic national mathematics honorary society. (Graduate students are eligible in their second year.) The standards are national and we induct members only in the Spring term but if you are eligible but not a member and are graduating 12/04, please let us know earlier. (The “honor cords” available for those walking in graduation ceremonies have been called “plenty cool.” Note them hanging on Ms. Diaguila's wall.)

HOUR TESTS; SHORT QUIZZES; NO MAKEUPS. Specific dates for 3 100-point hour tests will be announced at least a week in advance. Short answer quizzes and written take-home assignments weighted to count 100 points will be given with or without advance warning. Text material and supplementary material which is introduced in class will be covered on quizzes, tests, and the final. Makeup tests or quizzes are not given. A missed hour test will be excused only with sufficient verifiable evidence of acceptable extenuating circumstances. In accordance with departmental practice, the final exam percent grade will be used for the missing excused test absence; the lowest quiz grade is dropped before averaging to allow for unavoidable excused absences. In case of long-term illness individual make-up arrangements will be made. Also please note departmental policy: Absences due to family social events will not be excused. Acceptable medical excuses must state explicitly that the student should be excused from class. Students must take the final examination at the scheduled time, see below.

FINAL EXAM. Tues Dec 7 5:30 p.m. (This is the exam period for TR 2 pm classes.) Cumulative, and weighted more heavily toward the material since the third hour test.

GRADING. The 3 hour tests count 100 points each. Your percentage on the short “formula/problem” quizzes or written take-home assignments is 100 points of the grade. The submissions and participation, subjectively evaluted, of the Professionalism component count 100 points. The final exam (Dec 7 5:30 pm) counts 150 points. A,B,C,D,... with + and – grades are awarded based on 90,80,70,60... percent of the total points.

Attendance is expected at classes and required as part of the Professionalism component at all Thurs. 5:15 speakers as announced; an alternate assignment will be provided for the latter in the case of unavoidable excused absence. Note above policy about missed quizzes or tests. Note also that in keeping with FSU policy for dual numbered courses, graduate students are required to do all work required of undergraduates, plus additional assignments.

ACADEMIC HONOR CODE. A copy of the University Academic Honor Code can be found in the current Student Handbook. You are bound by this in all of your academic work. It is based on the premise that each student has the responsibility 1) to uphold the highest standards of academic integrity in the student's own work, 2) to refuse to tolerate violations of academic integrity in the University community, and 3) to foster a high sense of integrity and social responsibility on the part of the University community. Please note that violations of this Academic Honor System will not be tolerated in this class. Specifically, incidents of plagiarism or failure to attribute the source of your material of any type or referring to any unauthorized material during examinations will be rigorously pursued by this instructor. You have successfully completed many mathematics courses and know that on a “test” or “quiz” you may not give or receive any help from a person or written material except as specifically designed acceptable. Out of class you are encouraged to work together on assignments but plagiarizing of the work of others or study manuals is academically dishonest.

A.D.A. STATEMENT. Students with disabilities needing academic accommodations should: 1) register with and provide documentation to the Student Disability Resource Center (SDRC); 2) bring a letter to the instructor from SDRC indicating you need academic accommodations. This should be done within the first week of class. This and other class materials are available in alternative format upon request.

ABOUT YOUR TEXT. Instructors comment about text references: There is not time to discuss everything in class, and certainly not time to work all the problems. Further, you have solution outlines (but you will need to fill in the steps necessary for a clear solution!). If you have questions, please e-mail me the particular book part or or problems so that I can “work them in” at an appropriate place in the lesson.

Note the book is divided into two main sections, I (Unit 1 and Unit 2) and II (Units 1–6). On p. I–2 the structure of each chapter is described. The page numbering is cumbersome. If I write (“understand IU1 Ex4” this means Example 4 of Unit 1 of Section I on page I–15). Once we are over to Section II of the book, I won't state section in referring to Units or pages so U2 Ex3 means Example 3 of Section II Unit 2 on page II–60.

Each unit has “Conceptual Review Test” (I'll call those “N”) and “Computational answers given. Hint: don't read the solutions until you have tried to answer! The assignment IN1[2,3] means do Conceptual Test items 2 & 3 on p. I–29; M2[2–6] means Computational Review problems on p. (II–)83. I will also assign some problems from the last section “Unit Review Questions” (denoted “R” problems). I will also assign problems from other sources (including Bowers) and these supplementary materials are tested. Note that examples are very important. You should fill in any additional details you need to understand each example and remember the method for each. Aside — a promise: Each course test will include at least FOUR problems that are [identical or almost so to] Examples from ACTEX text or assigned problems from M, N or R.

FOR YOUR CALENDARS. THURSDAYS 5:15 — 9/9: A get acquainted session with Dr. Case and Dr. Paris and some visitors. Resume session 9/23 in 303 MCH. OPTIONAL: On 9/16 you may attend a session on Presentations (Powerpoint) by Mr. Mickey Boyd; 303 MCH. If you attend this it will count as a “wild card” (a get-out-of-jail-free-card) to substitute if you must miss an announced FSSAS activity another date.

EARLY ASSIGNMENTS. We will give you IU1 to use while you are waiting to receive your text.

Early warning: The First Hour Test, IU1&2 is likely 9/21. Most likely dates for the other 2 hour tests are 10/26 and 11/30; any changes will be announced at least a week before the actual test date.

Before T 8/24 class, read and be sure you understand ALL of this syllabus. Questions? Then read/study IU1 pp.3–10. Also class handout H1 (happy googleing!). Begin work on IU1Ex1, p. 9. Using text, try to answer IN1[1,9]; IM1[1,2].

Before R 8/26 class, consider the parallel ideas between interest and mortality on handout H2. Re-study IU1 and continue through p. 12. Note there are SIX RELATED WAYS of specifying a population distribution (“5 equivalent” ways in the NOTES section beginning p. 19; the SIXTH is the small p and q notation, see p4.) Try do understand problems IN1[1, 2, 6, 8, 9, 10]; IM1[1, 2, 3, 6] and I–1 Example 2.

Before M 8/30, extend your reading and study through p. 16 and note many formulas on the list pp. 19–28 that you should know now. Do all previously assigned examples and problems. IU1 Ex 3. N1[3, 4, 5, 7]; M1[4]; R1[1, 6, 8] Do you understand the last paragraph on p9?

ON T 8/31 there will be a short quiz on the definitions and concepts through p. 12. Study I–1 Ex. 4 & 5.


This document is maintained by
Melissa Elaine Smith
smith@math.fsu.edu
Last modified: 8 September