Modelling is crucial for actuarial practice as it allows actuaries to assess and manage risks in various circumstances. This module gives you the valuable practical and theoretical skills needed to navigate these critically relevant issues: What are the commonly used models in actuarial science? How can we apply these models to tackle the complex problems faced by financial professionals in practical situations?
In this module, you will gain a strong foundation in financial economics modelling techniques. You will be able to apply these techniques in quantitative risk management, including portfolio selection, and the pricing and valuation of financial derivatives.
You will develop valuable skills to model economic decision making by forecasting potential future scenarios, and will apply a range of financial risk measurement tools to evaluate suitable investment opportunities. In addition, you will explore a range of liability valuation modelling tools, which have applications in insurance for estimating claims.
The modelling techniques that you learn in this module will provide you with the indispensable knowledge and skills needed for a successful career in insurance, finance, and related areas.
You will also have the opportunity to gain valuable exemptions from subject CM2 of the Institute and Faculty of Actuaries (IFoA, UK).
56
Take home test worth 30%
Examination worth 70%
Reassessment: Like-for-like
Composite form of reassessment for failed components – examination
On successfully completing the module, students will be able to:
1) Comprehensively evaluate the performance of different business actions with stochastic outcomes for making an informed decision using the relevant theories in financial economics;
2) Systematically assess, showing critical awareness of, various financial economic models;
3) Solve complex actuarial problems related to quantitative risk management, derivative pricing and forecasting;
4) Appraise and interpret the returns and the values of assets, liabilities, and derivatives with the advanced mathematical frameworks which are commonly used in the industry;
5) Critically evaluate the rationale behind the economic models and their outcomes and communicate appropriately.
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