1
$\begingroup$

Some context: The actuarial curriculum offers two papers on quantitative finance (QF):

  • CT8: Financial Engineering (Utility theory, Measures of risk, MVPT, CAPM, Binomial model, stochastic calculus, Black-Scholes)

  • ST6: Financial derivatives (this is essentially an extension of CT8, and goes into the more exotic stuff: structured derivatives, interest rate models, credit derivatives)

I am an actuarial student who has cleared CT8, and is currently reading ST6 purely out of curiosity.

The field of QF very much interests me, and I would like to assess my current level of knowledge about it. Such a need arises because actuarial science traditionally focuses on insurance models, with QF not receiving the limelight.

This brings me back to my original question: how comprehensively do actuarial papers cover QF?

$\endgroup$

1 Answer 1

2
$\begingroup$

I dont know if i am qualified to answer this.

I was an actuarial student as well. Graduated last year, but I didnt undertake further professional exams. I passed the first three exams and earned all the exemptions (3 i think) under SOA exams during my school years. I am fascinated by quantitative finance during my studies too and decided it'd be best that I continue with posgraduate studies, if i want to focus on QF.

The reason I decided to switch it's because I feel like the exams are business focused instead of mathematical focused (it's a weird reason I know). Quantitative finance is a huge field, you won't experience and understand everything even if you study for your whole life. I passed ST6 equivalent exam in SOA (got a 9/10 score). What I can say about the paper is that it's all about methods and tactics. It's memorizing focused in my opinion, if you have seen the question and done it, most likely you'll be able to do it in the exam. I really hate that about actuarial professional exams. For quantitative finance wise, ST6 is just a really really small portion of quantitative finance.

Just some heads up, there will be much more difficult material in your future exam papers that involves in stochastic calculus (i finished some of the recommended books). But that too, I feel like it's insufficient to my study in master. It's all about what you want to be focused on, for actuarial profession, it's business focused. You learn what you need and apply it, most likely you wont be able to push the boundary of knowledge in quantitative finance with the knowledge of just professional papers. There's a profession in the industry called "quantitative analyst", look it up, it pays better than actuaries but typically requires postgraduate degrees in math, computer science, stats.

just my 2 cents contribution

$\endgroup$
2
  • 1
    $\begingroup$ 1) I totally relate to the point that actuarial exams are very memorization focused—many students with a superficial understanding of the material pass the exams just by solving past papers. 2) Thanks for the heads up. I think I am in a decent position: I finished the first 9 papers in the first attempt while I was an undergrad, and I have read (although not finished) Hull and Baxter&Rennie. 3) 'Pushing the boundaries of QF'—as fascinating as that would be—is not something I am cut out for. So the focus of the question is the required knowledge from the perspective of a 'serious practitioner'. $\endgroup$ Apr 9, 2020 at 5:20
  • 1
    $\begingroup$ Thanks for taking out the time to write this answer. I really appreciate the insight and the effort! $\endgroup$ Apr 9, 2020 at 5:23

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Not the answer you're looking for? Browse other questions tagged or ask your own question.