IC47A-1 CASUALTY ACTUARIAL SCIENCE PART 1 - 03

Que. 1 : Q1) If : Exposure Units = 84,653
Claim Count = 885, and
Scale Factor = 1,000;
Then : Which of the following format is correct to find out Frequency per ‘k’ Exposure Units?

   1.  a) 1,000*(885) /84,653

   2.  b) 1,000*(885) *84,653

   3.  c) 1,000*(885) +84,653

   4.  d) 1,000*(885) -84,653

Que. 2 : Q2) Which of the following statements is correct?

   1.  a) A risk neutral decision maker would have a utility function that is exponential.

   2.  b) A risk averse decision maker would have a utility function that decreased at a progressively lower rates or had a positive second derivative.

   3.  c) A decision maker who favoured risk would have a utility function that increased at a progressively faster rate or had a positive second derivative.

   4.  d) All the above statements are correct.

Que. 3 : Q3) Which risks exists when there is a chance of loss but no chance of gain?

   1.  a) Objective risk

   2.  b) Speculative risk

   3.  c) Subjective risk

   4.  d) Pure risk

Que. 4 : Q4) A homeowner has the risk of losing all or part of his home, but no chance of gain, if a fire occurs is an example of which risk?

   1.  a) Subjective risk

   2.  b) Speculative risk

   3.  c) Pure risk

   4.  d) Objective risk

Que. 5 : Q5) What do the following are generally reviewed as the actuary's primary responsibilities in rate-making?

   1.  a) Affordability of coverage

   2.  b) Desired level of profit

   3.  c) what the competition is charging

   4.  d) All of the above