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Want to be an actuary? Odds are, you’ll fail the test

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Re: Want to be an actuary? Odds are, you’ll fail the test

#21

Post by dhosek »

HWR_14 wrote: post #9
omosubi wrote: post #2

I feel very difficult exams should be commonplace. Everyone should be held to very high standards. It's surprising how many professions don't do this. For example, I've been to several physical therapists who barely seemed to understand what was wrong with me even after several visits. Each gave me what seemed like the same standard routine that they give everyone with problem.

Meanwhile, they often gate the requirements to even take the test. It would be chaos (and bad for the law schools) if someone were able to take the bar without a JD (some states have just as lengthy apprenticeship periods replace that) or otherwise prove professional ability acquired via non traditional means.

My grandfather got his architecture license without a college degree (in the 1920s). He often related riding down to Champagne, IL to take the exam in the rumble seat of a Model T Ford with a couple college grads to take the exam. He passed the exam and they both failed.

I was somewhat surprised watching the Perry Mason series on HBO last year when Perry Mason was sworn to the bar without actually going to any sort of law school. Apparently that was the norm until after World War II.

Re: Want to be an actuary? Odds are, you’ll fail the test

#22

Post by tfehring »

stbtrax wrote: post #3

From experience from a few close friends: Actuarial science is always in the lists of top jobs but it's a terrible career. It's quite limiting and doesn't pay particularly well. The companies are all old and stagnant and the amount of time put in to studying for exams is taxing. It'd be much better ROI to put that time into studying for sw-eng roles. That is, unless you're particularly interested in memorizing math f…

I left the actuarial field for basically the reasons you describe, but the characterization still strikes me as somewhat unfair. Actuaries reliably make significantly above the median US income right out of undergrad, and reliably double that income within a decade, working 40 hours a week, without needing to go to a target school or get an advanced degree. That alone makes it a good career by most objective standards.

Software engineering is sort of a trump card in that it looks better than basically any other career on paper, but everyone can't be a software engineer. And while the actuarial field draws from a similar talent pool as software engineering, I think most people who enjoy one wouldn't enjoy the other - the former is much more of a business-y profession. I personally find the work I do as a SWE way less interesting than the work I did as an actuary, even though I'm not big on memorizing formulas.

Re: Want to be an actuary? Odds are, you’ll fail the test

#23

Post by ZephyrP »

not-my-account wrote: post #16

Is the answer to the question at the top 0.33? let pc = purchased_collision, pd = purchased_disability we have: 2 * P(pc) = P(pd) P(pc & pd) = 0.15 so P(pc) * P(pd) = 0.15 2 P(pc)^2 = 0.15 --> P(pc) = 0.274, P(pd) = 0.548 So the probability of neither pc nor pd is !P(pc | pd) = 1 - P(pc) - P(pd) + P(pc & pd) = 0.328 ~= 0.33? The addition of P(pc & pd) was to take account of the double counting of pc and pd. Please le…

I got the same result as you, but in my mind the expression "twice as likely to purchase" could just as easily have meant P(C) = 2 * P(D) / 1 + P(D) (yielding 0.35824) rather than 2 * P(C) (yielding 0.32841).

Re: Want to be an actuary? Odds are, you’ll fail the test

#24

Post by ummonk »

not-my-account wrote: post #16

Is the answer to the question at the top 0.33? let pc = purchased_collision, pd = purchased_disability we have: 2 * P(pc) = P(pd) P(pc & pd) = 0.15 so P(pc) * P(pd) = 0.15 2 P(pc)^2 = 0.15 --> P(pc) = 0.274, P(pd) = 0.548 So the probability of neither pc nor pd is !P(pc | pd) = 1 - P(pc) - P(pd) + P(pc & pd) = 0.328 ~= 0.33? The addition of P(pc & pd) was to take account of the double counting of pc and pd. Please le…

It is yes.

Definitely need a calculator to be able to do sqrt(0.075) and calculate the result.

Though I was able to figure it out in my head without a calculator by eliminating choice A and choice C (I tried pd=0.3 and pd=0.2 to prove the answer had to be >0.28 and <0.48).

Re: Want to be an actuary? Odds are, you’ll fail the test

#25

Post by feoren »

To be honest, everyone working in science, engineering, data science, actuarial science, or really any numbers-heavy field should be able to answer that first question by reasoning through it. It may be slow, it may require drudging up some distant memories from college, or it may even require a visit to Wikipedia; but if you work with numbers and you can't do that example problem, you owe it to your profession to brush up on your statistics. People not understanding pretty basic statistics like that is a major root cause of almost all the problems in science today (p-hacking, etc.). Many, many statistics problems (including the example) can be solved easily (again: not necessarily quickly) by the basic technique of scribbling out a rectangle or tree of possibilities and the probability of each.

Re: Want to be an actuary? Odds are, you’ll fail the test

#26

Post by dhosek »

npmisdown wrote: post #11

So the answer to the question in the topic is (B) ~0.33 (can't see the answer because of the paywall)? Doesn't seem to be a particularly tricky question unless I miss something, just basic probability theory calcs.

That was my answer as well: My reasoning: Let x be the probability of purchasing disability coverage, thus the probability of purchasing collision is 2x from conditions b and c, we know that 2x∙x = .15 so we can calculate the probability of neither applying as 1-(2x+x)+2x∙x = .18 + .15 = .33

I can see the trap of forgetting to add 2x∙x in the calculation (since we don't want to double count the case where they purchase both insurances). And choices d and e follow from forgetting to subtract the probability of purchasing either from 1 (and making the same mistake of not removing the double count). I'm curious where the .48 distractor comes from. Coming up with good distractors is the secret to making a multiple choice test hard (students tend to think that multiple choice will be easier than a fill in the blank test, but they forget that with free answer exams, they can still get partial credit where in a multiple choice test, they'll lose all credit for a small mistake).

Re: Want to be an actuary? Odds are, you’ll fail the test

#27

Post by ryan93 »

908B64B197 wrote: post #19
topkai22 wrote: post #10

Earlier quoted context omitted.

The over use of occupational licensing has some well documented negative effects, see https://www.econlib.org/library/Enc1/OccupationalLicensing.h... for some points about it. However, physical therapists already have an occupational licensing exam. You could argue that it’s not hard enough, as it does have a high pass rate for those who have graduated from a PT university program, but then you start drifting into “n…

> The over use of occupational licensing has some well documented negative effects That's because it's done wrong.

! we just found the guy who knows how to do it right. What a day for humanity!

Re: Want to be an actuary? Odds are, you’ll fail the test

#28

Post by dc-programmer »

Denvercoder9 wrote: post #14

If the sample question is actually representative of the exam, I'm surprised that people that actually study for this fail that often. I haven't had any statistics education since high school, and found it fairly straightforward to solve.

Years ago, I looked at sample questions for the probability exam, which most people take first. To get a passing score you had to be able to quickly recall different probability distributions and also you needed to have a pretty solid grasp of the mechanics of things like double integration. Intro calculus-based mathematical probability classes cover most of the material, but passing the test requires mastery of at least the applied side of math probability.

Re: Want to be an actuary? Odds are, you’ll fail the test

#29

Post by riskneutral »

smegsicle wrote: post #17
stbtrax wrote: post #3

From experience from a few close friends: Actuarial science is always in the lists of top jobs but it's a terrible career. It's quite limiting and doesn't pay particularly well. The companies are all old and stagnant and the amount of time put in to studying for exams is taxing. It'd be much better ROI to put that time into studying for sw-eng roles. That is, unless you're particularly interested in memorizing math f…

> put that time into studying for sw-eng why not both? an environment of stagnant companies offering jobs involving difficult calculations sounds ripe for disruption- is it being strangled by regulation or something?

> why not both? an environment of stagnant companies offering jobs involving difficult calculations sounds ripe for disruption- is it being strangled by regulation or something?

Those jobs only exist because of regulation. The regulation dictates that the insurance companies must do those calculations and that the calculations must be done by a specially ordained priesthood of actuaries who have passed a bunch of random math and finance exams. That priesthood does not want technological disruption, they like their spreadsheets just fine, thank you. In recent years the executives at the insurance companies went through a fad where they decided they wanted to try out this whole "disruption" and "innovation" thing, so they created various kinds of "innovation" departments. Typically, when a company does that, after a few years "innovation" becomes a four letter word and they never talk about it again. In order to climb the corporate ladder as an actuary, you have to focus on the politics surrounding you and not on the terrible technology surrounding you.

Re: Want to be an actuary? Odds are, you’ll fail the test

#30

Post by yukinon »

tfehring wrote: post #22
stbtrax wrote: post #3

From experience from a few close friends: Actuarial science is always in the lists of top jobs but it's a terrible career. It's quite limiting and doesn't pay particularly well. The companies are all old and stagnant and the amount of time put in to studying for exams is taxing. It'd be much better ROI to put that time into studying for sw-eng roles. That is, unless you're particularly interested in memorizing math f…

I left the actuarial field for basically the reasons you describe, but the characterization still strikes me as somewhat unfair. Actuaries reliably make significantly above the median US income right out of undergrad, and reliably double that income within a decade, working 40 hours a week, without needing to go to a target school or get an advanced degree. That alone makes it a good career by most objective standard…

This could be outdated information that I have, but don't actuaries constantly need to study for their exams/certs? Does that fall outside of the 40 hour/week range, or is that done on work time?
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