The Foundation


With my exam in Financial Mathematics set for this week, along with finishing up the exam in Probability earlier this year, I am excited to see what is next in store with the next two exams: Models of Life Contingencies & Models of Financial Economics. By just taking a peek of the material that I hope to be taking on next year I can see that these first two preliminary exams truly do set the foundation necessary to comprehend the fascinating “models” exams.

Probability destroyed my false understanding of how the universe of chance ought to be understood. Choosing to take on a career in actuarial science has given me more intellectually than I had ever even imagined. Nevertheless, learning how calculus and simple counting is applied and necessarily applied to our calculation needs is fascinating. It is interesting to see how probability is applied in financial models in calculating the price of derivatives contracts and used in determining the survival rate of a person’s class. Option prices can be seen as early in the financial mathematics exam where the put-call parity equation is heavily relied on as a source of question material for the derivatives portion of the exam.

Where the Probability Exam gave me a real understanding on probability theory, the Financial Mathematics Exam astonished me on theory of interest. The theory of interest had always been something I wasn’t very keen on and the introduction of “i, d, and v”, not to mention the annuity symbols did not help at all initially. But over the course of time and getting through the material, everything else began to make sense. I was always fascinated in derivatives long before even considering taking an actuarial exam and being able to look forward to getting an actuarial look of derivatives at the end of the Adapt eCourse always kept me going. Furthermore, the theory of interest is crucial to the models exams in factoring in the time value of money in option pricing along with the use of life-contingent annuities products. The Financial Mathematics is often referred to as the most practical of the exams for daily use; I have heard from many actuaries that it is one of the only exams that remains one they remember. As a student riding the trains in New York City, I am often drawn to the APR rates found on the advertisements and then calculating the annual effective rate and even throwing in an annuity formula to see what can be done; all this being learned from Coaching Actuaries.

Ultimately, each time I approach the end period of exam I am always torn. There is a part of me that is afraid that I will fail and will have to continue  studying the material further to hopefully pass, there is also another part of me that is excited for a nice break after the exam to rest and recover from the rigor that these exams require of us students. Yet, there is another part of me that is excited for the next set of exams where the material I have learned will continue to be expanded and that this model will circulate until all the exams are hopefully completed.