Actuarial Science: Financial Math and Probability

University of Wisconsin–Madison via edX Professional Certificate

Overview

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This certificate program consists of four courses that cover the financial math and probability concepts you need to begin a career as an actuary.

The program includes two financial math courses that cover material tested on Exam FM of the Society of Actuaries. In these courses, you will learn to project forward and discount back cash flows from loans, bonds or other financial instruments. Applications in actuarial science are emphasized.

The program also includes two probability courses that cover material tested on Exam P of the Society of Actuaries. In these courses, you will study general probability and random variables (both univariate and multivariate) and learn how these concepts apply to actuarial science jobs.

By completing this certificate program, you will have the topical background necessary to sit for SOA exam P and SOA exam FM. The threshold for passing these exams can be high, and additional self-study may be necessary to gain the speed and accuracy needed to pass the exams.

Those who complete this certificate and hold a bachelor’s degree are eligible to expand their actuarial education by applying for preferred admission to UW–Madison’s Actuarial Science Capstone Certificate Program.

Syllabus

Courses under this program:
Course 1: Financial Math for Actuaries: From Rates to Annuities

Start your actuarial career! Study the time-value of money through learning about interest rates, the present and accumulated values of future payments, and the annuity valuation process. This actuarial science course covers foundational concepts tested on SOA Exam FM or CAS Exam 2. This course is part 1 of a 2-course program intended to help students prepare for the SOA Exam FM and CAS Exam 2.

Course 2: Financial Math for Actuaries: From Loans to Bonds to Immunization

Start your actuarial career! Study the time value of money by learning about loans, bond valuation, duration, convexity, spot rates, forward rates and the term structure of interest rates. This actuarial science course covers foundational concepts tested on SOA Exam FM or CAS Exam 2. This course is part 2 of a 2-course program intended to help students prepare for the SOA Exam FM and CAS Exam 2.

Course 3: Probability for Actuaries: Introduction to Discrete Distributions

This actuarial science course covers introductory probability theory that can be applied to risk management. Topics covered include an introductory examination of descriptive statistics of data sets, the interpretation of histograms, and the development and application of discrete probability models commonly used to model business risk. This course is intended to familiarize learners with the material covered on Exam P from the Society of Actuaries, also known as exam 1 for the Casualty Actuarial Society.

Course 4: Probability for Actuaries: Continuous Distributions

This actuarial science course covers the features and uses of continuous probability distributions as well as the law of large numbers and the central limit theorem. Multivariate discrete distributions are also covered. This course is intended to familiarize learners with the material covered on Exam P from the Society of Actuaries, also known as exam 1 for the Casualty Actuarial Society.

Courses

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6 weeks, 4-6 hours a week, 4-6 hours a week
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In preparation for SOA Exam FM / CAS Exam 2, the Financial Math for Actuaries: From Rates to Annuities course will give you opportunities to better understand the time value of money through these learning activities:
- Perform calculations relating to the present value, current value, and accumulated value of cash flows, using rates of interest, rates of discount and the force of interest.
- Calculate the present value, current value, and accumulated value for sequences of non-contingent payments (annuities).
- Reflect payment timing, longevity, and arithmetic/geometric payment changes in the annuity valuation process.
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9 weeks, 4-6 hours a week, 4-6 hours a week
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In preparation for SOA Exam FM / CAS Exam 2, the Financial Math for Actuaries: From Loans to Bonds to Immunization course will give you opportunities to better understand the time value of money through these learning activities:
- Performing calculations related to loan payments, loan balances, loan amortization tables and loan refinancing
- Calculating the price of bonds with various features, developing bond amortization tables and effective yield rates
- Calculating the net present value of cash flows, and developing internal rates of return
- Studying the term structure of interest rates, and calculating the duration/convexity of assets whose value is sensitive to interest rates
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9 weeks, 4-6 hours a week, 4-6 hours a week
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Actuarial work involves modeling future contingent events that are uncertain in terms of timing, frequency and severity. Understanding the central tendency of a contingency and its possible distribution is critical for an actuary to help individuals and institutions manage risk. This course starts with a brief discussion of data analysis, focusing on the central tendency and distribution of data. Introductory probability concepts are introduced next. The course concludes with a study of discrete probability models with an eye toward actuarial application.
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9 weeks, 4-6 hours a week, 4-6 hours a week
View details

Actuarial work involves modeling future contingent events that are uncertain in terms of timing, frequency and severity. Understanding the central tendency of a contingency and its possible distribution is critical for an actuary to help individuals and institutions manage risk. This course covers continuous univariate probability distributions, discrete multivariate probability distributions, the law of large numbers and the central limit theorem with an eye toward actuarial applications.