Actuarial Studies (1 Viewer)

[apurba]

Hey guys,

I'm considering doing actuarial studies at university. I've been told that you have to really like maths & be interested in finance to like actuarial studies. I like maths but am unsure about finance, as I'm only doing maths & science subjects.
At the moment, I'm leaning more towards engineering but want to learn more about actuarial studies before I definitely decide on engineering.

Could someone please explain to me what the finance component of actuarial studies involves?

 

[Loudvicuna]

Quack Quack

 

[Cleavage]

Plenty of students studying actuarial studies studied Eng/MX1/MX2/Phys/Chem in HSC.

It's a bit difficult to describe actuarial content to a high school student. Thus far, I've found actuarial to be the intersection of probability and finance. In terms of finance, I think it can best be described as the study of opportunity cost (at least in the first/second year courses). It is about calculating the value of different projects, based on the cashflows that they will incur, and the time in which they are obtained (cash today is more valuable than cash in a years time). "Introduction to Actuarial Studies" (a first year course) revolves around the introduction of probability to these problems; for example, an insurance company has to consider the probability of claims in future in order to effectively "price" the premium of their insurance policy today. An actuary will undertake this assessment.

 

[v1]

Actuarial studies is probably around 85% statistics, 15% finance

Statistics
You will do introductory math units to help with the matrix notation and differential equations you encounter in your later actuarial units which predominately involve modelling data (size of claims,time until death, etc). Most of the actuarial units will involve heavy amounts of statistics, which you haven't been exposed to in high school. Alot of the quantitative stuff involve manipulating summations (discrete) or integrals (continuous) in order to find the expected value and variance of a random variable (again size of claims, time until death... etc). This is probably the "mathematics" everyone refers to when talking about actuarial studies.

Finance
You will look at the extremely quantitative side of finance. Asset and liability modelling, stochastic interest rates, black-scholes option pricing, time series etc. Pretty much what a finance major student will do but more in depth, and with more rigour in the mathematics.