MECE 003 ACTUARIAL ECONOMICS : THEORY AND PRACTICE December 2019 Question Paper

 

MECE 003 ACTUARIAL ECONOMICS : THEORY AND PRACTICE

December 2019 Question Paper

Time : 3 Hours] [Maximum Marks : 100

Note : Attempt questions from each section as per instructions given under each section.

SECTION-A

Attempt any two questions from this section :

1. State and prove Chebyshev's theorem. What is Weak Law of Large Numbers (WLLN) ? Explain the application of Chebyshev's Theorem in WLLN.

2. What do you mean by Panjer recursion ? Discuss its use in collective risk modelling.

3. What is the difference between effective interest rate and nominal interest rate ? Find the relation between them.

4. Why reserving is important in insurance ? Which of the reserving techniques you would like to use for insurance industry ? Give reasons in support of your answer.

SECTION - B

Attempt any five questions from this section :

5. What is Black-Scholes model ? How do you get the replicating strategy in Black-Scholes model ?

6. Write the meaning of term life insurance.

7. What is the difference between Exponential law and Gompertz Law of mortality ? Define a life table. State the meanings of various columns of life table.

9. What do you mean by multiple decrement theory ? Explain.

10. What is Extreme Value Theory (EVT) used for ? Explain the Generalised Extreme Value (GEV) distribution.

11. What is Dynamic Financial Analysis (DFA) ? What do you mean by efficient frontiers in DFA ?

12. Why should insurance industry be regulated ? Who should regulate the insurance business : State Governments or the Central Government ?

 

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