actuarial jimmy sept20

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Introduction to Actuarial Exams

James Risk

Michigan State University

September 20, 2012

James Risk Introduction to Actuarial Exams
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My Credentials (i.e. my bragging slide)

Passed Exam 1/P January 2010 (first try), score 7

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Passed Exam 2/FM August 2010 (first try), score 9

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Passed Exam 2/FM August 2010 (first try), score 9 Passed Exam 3C/MLC May 2012 (first try), score 8 (note this

sitting was the first sitting after the syllabus changed, and wasrumored to be one of the hardest sittings in actuarial exam

history. Several people petitioned the SOA to get refundsand/or get the grades to curve).


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Introduction

Actuarial Exams are standardized tests offered by the SOAand CAS.


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Introduction

Actuarial Exams are standardized tests offered by the SOAand CAS.

The preliminary exams are generally the same within the twosocieties, and you can take one and have it count for another.


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Introduction (contd)

MSU offers courses that delve into exam material. All 5 examsare covered to some extent, but it is highly recommended(almost necessary) to study on your own with a study manual.


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MSU offers courses that delve into exam material. All 5 examsare covered to some extent, but it is highly recommended(almost necessary) to study on your own with a study manual.

The point of this talk is to explain how to sign up for exams,how to set yourself up for exams, and to introduce additional

resources useful for this process.


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The 5 preliminary exams are necessary to become an A.S.A.(with a few additional requirements), after which you can

branch out into more specialized fields to obtain an F.S.A..To become an F.S.A. is one of the highest accomplishments inthe actuarial field. The CAS has analogous certifications onthe Casualty side of things.


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http://www.prometric.com/soahttp://goforward/http://find/http://goback/


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The 5 preliminary exams are necessary to become an A.S.A.(with a few additional requirements), after which you can

branch out into more specialized fields to obtain an F.S.A..To become an F.S.A. is one of the highest accomplishments inthe actuarial field. The CAS has analogous certifications onthe Casualty side of things.

In order to sign up for exams, visit www.prometric.com/soato

identify computer based testing centers. There is one locatedin East Lansing. You can sign up for the exam there. Theprice of exam varies from $200-$375


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http://www.prometric.com/soahttp://www.prometric.com/soahttp://find/


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Exams

Exam P/1, Probability


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Exam FM/2, Financial Mathematics


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Exam MFE/3F, Models for Financial Economics


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Exam MLC/3L, Models for Life Contingencies


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Exam C/4, Construction and Evaluation of Actuarial Models


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Exam 1/P is traditionally the first exam taken by aspiring

actuaries. It is the contender for easiest exam (othercandidate is 2/FM).


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Covers: Undergraduate probability, including some actuarialapplications.


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Offered in: January, March, May, July, September, November.


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Offered in: January, March, May, July, September, November.

MSU Courses with similar material: STT441


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Another contender for easiest exam. This exam is traditionally

taken second, though it is sometimes taken out of order if youhave a finance background.


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Covers: Interest rate theory, introductory financial derivatives


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Offered in: February, April, June, August, October, December


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Offered in: February, April, June, August, October, December

MSU Courses with similar material: MTH360, FI379


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Exam MFE/3F is in the harder tier of exams. The last threeexams are generally taken in any order, mostly as to whatever

preference you have in course material.


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Covers: Financial derivatives, more advanced interest ratemodels, basic stochastic analysis, simulation.


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Covers: Financial derivatives, more advanced interest ratemodels, basic stochastic analysis, simulation.

Offered in: March, July, November.


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preference you have in course material. Covers: Financial derivatives, more advanced interest rate

models, basic stochastic analysis, simulation.

Offered in: March, July, November.

MSU Courses with similar material: FI379, MTH457,MTH458


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Exam MLC/3L recently had a syllabus change, but still

generally covers the same material.


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generally covers the same material. Covers: Models used to model decrements used in insurance

and annuities, benefit reserves, stochastic models


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generally covers the same material. Covers: Models used to model decrements used in insurance

and annuities, benefit reserves, stochastic models

Offered in: May, November (NOTE: MLC/3L is the onlynon-CBT exam).


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Exam MLC/3L recently had a syllabus change, but stillgenerally covers the same material.

Covers: Models used to model decrements used in insuranceand annuities, benefit reserves, stochastic models

Offered in: May, November (NOTE: MLC/3L is the onlynon-CBT exam).

MSU Courses with similar material: STT455, STT456


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Exam C/4, Construction and Evaluation of Actuarial

Models

Exam C covers an introduction to modeling and coversimportant actuarial methods that are useful in modeling. It is

the most statistical out of the 5 preliminary exams, and isusually taken last.


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Models



Covers: Statistical models (construction and analysis of), RiskMeasures, Statistical Methods, Credibility, Simulation


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G l Ti li
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Models




Offered in: February, June, October.


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Models




Offered in: February, June, October. MSU Courses with similar material: No undergraduate

courses, though topics are touched upon in a variety ofcourses (STT442 in particular).


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General Timeline

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Timeline Outline

1. Pick an exam you want to take.


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2. Pick a sitting that you plan on taking.


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3. Buy a study manual


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4. Set up a (reasonable) study schedule


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4. Set up a (reasonable) study schedule

5. Stick to your study schedule!!


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Resources

1. Picking an exam

Picking an exam should be based on several things:


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Resources

1. Picking an exam


Pick an exam related to material you are studying right now

(i.e. exam 1/P if you are taking STT441, exam 2/FM if youare taking MTH360, and so on).


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1. Picking an exam




Pick an exam for material that you are interested in and whatyour background is. For example, if you are a finance major,maybe 2/FM is better than 1/P.


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1. Picking an exam




Pick an exam for material that you are interested in and whatyour background is. For example, if you are a finance major,maybe 2/FM is better than 1/P.

Take the exams in a reasonable order. You should take 1/Pand 2/FM before you take the last three.


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2. Picking a sitting

In general, you should pick a sitting 3-6 months in advance.


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This gives you enough time to learn the material and drill

practice problems and exams without freaking out.


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This gives you enough time to learn the material and drill

practice problems and exams without freaking out.

Plan ahead. As an example, if you are taking 18 credits worthof tough 300/400 level classes, perhaps itd be better to takea January sitting even if you have your heart set on taking it

in November. That way you can have winter break to do themajority of your studying.


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Resources


The two top brands of study manuals are ACTEX and ASM.


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ACTEX manuals tend to teach material more thoroughly, andare less difficult than ASM manuals.


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ASM manuals generally have more difficult problems.


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Both manuals have their upsides. It is generally accepted thatACTEX is better for P and ASM is better for the other four.A lot of it is up to preference, however.


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Both manuals have their upsides. It is generally accepted thatACTEX is better for P and ASM is better for the other four.A lot of it is up to preference, however.

Make sure to get a manual that is relevant. You can buy usedmanuals for cheaper, but make sure that they cover thematerial on the exam syllabus, since the material can change.


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4. Study Schedule

A general rule is to study 100 hours total for each exam hour.As an example, exam 1/P is 3 hours long, so it isrecommended to study 300 hours total for it.


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4. Study Schedule


You will not need that much time if you have taken courses

with previous experience.


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4. Study Schedule



with previous experience. In general, you should only roughly follow that rule, and

instead study until you feel comfortable with that material.


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4. Study Schedule



with previous experience. In general, you should only roughly follow that rule, and

instead study until you feel comfortable with that material.

You will get your studying done if you set up a schedule. An

example could be to set up tentative rules for yourself, likestudy two hours every weekday night at 8:00pm, or studyMWF between class X and class Y. Following rules like thiswill set yourself up for success, and make sure that you dontslack on studying.


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4. Study Schedule (contd)

When you have about a month left until your exam, it is timeto start doing practice exams. Do them in controlled settings

(i.e. use a timer, go to a quiet room, dont take breaks), andscore yourself.


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4. Study Schedule (contd)

When you have about a month left until your exam, it is timeto start doing practice exams. Do them in controlled settings

(i.e. use a timer, go to a quiet room, dont take breaks), andscore yourself.

Dont overwork yourself. I always plan on not studying theday before an exam so that I can relax and give my mind arest. Studying too much in a short period can cause stressand make the whole process unappealing.


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The title says it all!


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The title says it all!

You need to set up a reasonable schedule for yourself. If youaim too high, then you will not meet your goals and becomeoverwhelmed. If you aim too low, then you wont get enoughpractice in.


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Miscellaneous Notes

There are useful websites that can supplement or replacestudy manuals, and these will be mentioned later in theresources section.


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Miscellaneous Notes

There are useful websites that can supplement or replacestudy manuals, and these will be mentioned later in theresources section.

Another thing worth mentioning is learning how to usecalculators. There are two recommended calculators, BA IIPlus, which is the one I use. It is a financial calculator andhas a lot of useful commands for 2/FM. The other is the

TI-30X II, (and similar), which is useful because you canlook back on what youve input.


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Online resources

ADAPT


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Online resources

ADAPT

The Infinite Actuary


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Online resources

ADAPT

The Infinite Actuary Society of Actuaries


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Online resources

ADAPT


Actuarial Outpost


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Online resources

ADAPT


Actuarial Outpost

Be an Actuary


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ADAPT

ADAPT (www.coachingactuaries.com) has online coaching forstudying. For a higher $ amount, it has entire learningcourses.


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ADAPT
http://www.coachingactuaries.com/http://www.coachingactuaries.com/http://find/


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ADAPT


It has bundles (i.e. pay $150 for a study manual (regular $50)and a 180 day pass to their online content) and passes toaccess their online material for periods of time.


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ADAPT
http://www.coachingactuaries.com/http://www.coachingactuaries.com/http://goforward/http://find/http://goback/


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ADAPT



It also has online exams that you can customize difficulty-wiseand it mimics the CBT experience.


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ADAPT


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ADAPT



It also has online exams that you can customize difficulty-wiseand it mimics the CBT experience.

I have not personally used it (since I did not actually knowabout it until halfway through studying for MLC), but itseems extremely useful and I plan on using it for Exam 4/C.


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Th I fi it A t


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The Infinite Actuary (www.theinfiniteactuary.com) is similarto ADAPT, but it is strictly an online learning course.


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Th I fi it A t
http://www.theinfiniteactuary.com/http://www.theinfiniteactuary.com/http://find/


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It has amazing lecture videos, and you can view the first few

for each exam for free.


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http://www.theinfiniteactuary.com/http://www.theinfiniteactuary.com/http://find/http://goback/


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for each exam for free. It has free practice exams for exam P (and $35 for two

practice exams for FM) that have online video solutions(VERY helpful!)


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The downside is that it is very expensive. The exam P courseis $400, while an ASM exam P manual is $100.


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The downside is that it is very expensive. The exam P courseis $400, while an ASM exam P manual is $100.

Regardless of purchasing, the free material is amazingly useful.


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Society of Actuaries


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The Society of Actuaries (www.soa.org) are the guys that runeverything.


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http://www.soa.org/http://www.soa.org/http://find/


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It is a good place to look for miscellaneous information.


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It is a good place to look for miscellaneous information. It also has a large database of sample questions, and it is

recommended to do every question in that database beforesitting for an exam.


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It is a good place to look for miscellaneous information. It also has a large database of sample questions, and it is

recommended to do every question in that database beforesitting for an exam.

This is also where you will sign up and register for exams, andregister your VEE credits.


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Actuarial Outpost


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Actuarial Outpost

The Actuarial Outpost (www.actuarialoutpost.com) is one ofthe most useful sites to an actuary.


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Actuarial Outpost
http://www.actuarialoutpost.com/http://www.actuarialoutpost.com/http://find/


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Actuarial Outpost


It a forum with millions of posts on all sorts of things. Youcan literally post anything actuarial related and you will get an

answer.

James Risk Introduction to Actuarial Exams Outline

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Actuarial Outpost
http://www.actuarialoutpost.com/http://www.actuarialoutpost.com/http://goforward/http://find/http://goback/


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Actuarial Outpost



answer. Examples of things Ive asked (and gotten answers for): What

is the best study manual for exam X/X? Is getting a mastersdegree useful in attaining an actuarial job? How do you doquestion X in Y manual? (and more...)


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Actuarial Outpost
http://www.actuarialoutpost.com/http://www.actuarialoutpost.com/http://goforward/http://find/http://goback/


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p



answer. Examples of things Ive asked (and gotten answers for): What

is the best study manual for exam X/X? Is getting a mastersdegree useful in attaining an actuarial job? How do you doquestion X in Y manual? (and more...)

They also have a section for resume critique and job postings.I posted my resume on there and got it critiqued by severalF.S.A.s and A.S.A.s that handle hiring at insurancecompanies.


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Be an Actuary
http://www.actuarialoutpost.com/http://www.actuarialoutpost.com/http://find/


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y

Be an Actuary (www.beanactuary.org) is a catchall site formiscellaneous information.


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Be an Actuary
http://www.beanactuary.org/http://www.beanactuary.org/http://goforward/http://find/http://goback/


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y


It tells you: what is an actuary, what do they do, finding jobs,college study, and has information on actuarial exams.


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Be an Actuary
http://www.beanactuary.org/http://www.beanactuary.org/http://find/


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y


It tells you: what is an actuary, what do they do, finding jobs,college study, and has information on actuarial exams.

It is especially useful for its information on actuarial exams, asit includes the sitting schedule for all exams, the syllabus forthe exams, and a lot of other miscellaneous information that

youd like to know.


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Offline Resources
http://www.beanactuary.org/http://www.beanactuary.org/http://find/


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Actuarial Club


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Actuarial Club

MSU Math Library


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Actuarial Club

MSU Math Library

MTH 490 (?)


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Actuarial Club

MSU Math Library

MTH 490 (?)

Me!


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Actuarial Club
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The Actuarial Club (this thing going on right now) isabsolutely great for social networking and asking people forinformation.


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Actuarial Club
http://msuactuarialscienceclub.yolasite.com/http://find/


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As well, you can visit msuactuarialscienceclub.yolasite.comwith lots of useful information.


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Actuarial Club
http://msuactuarialscienceclub.yolasite.com/http://msuactuarialscienceclub.yolasite.com/http://find/


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As well, you can visit msuactuarialscienceclub.yolasite.comwith lots of useful information.

The website also includes a list of members with what examthey are studying for, so that is a good way to meet new

friends and people to study with and ask questions to.


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MSU Math Library
http://msuactuarialscienceclub.yolasite.com/http://msuactuarialscienceclub.yolasite.com/http://find/


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The MSU Math Library has several study manuals for theexams.


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MSU Math Library


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They are slightly outdated, but are a great resource forreferencing, plus they have practice exams at the back.


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MSU Math Library
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I know they have manuals for 1/P, 2/FM, 3C/MLC, and Ibelieve they do for 3F/MFE and 4/C.


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MSU Math Library
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I know they have manuals for 1/P, 2/FM, 3C/MLC, and Ibelieve they do for 3F/MFE and 4/C.

Just ask for the actuarial study manual behind the desk.

They are big books in binders.


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MTH 490 (Exam P Study Course)
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Thomas McCollum, a former actuarial intern and graduatedM.S. Statistics student is teaching an exam P study coursethis spring.


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MTH 490 (Exam P Study Course)
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Thomas McCollum, a former actuarial intern and graduatedM.S. Statistics student is teaching an exam P study coursethis spring.

He has passed exam P personally, and is a very entertainingguy, so the course is highly recommended if you plan to takeexam P in the future.


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Me!
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I am glad to answer any questions you have, about anything

actuarial or even beyond that.


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I am glad to answer any questions you have, about anything

actuarial or even beyond that. I will try hard to attend every club meeting, so you can ask

me questions there, or if you see me in the halls in Wells, feelfree to say hello and ask questions.


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Thank you all very much for your time.


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Thank you all very much for your time. Any Questions?

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actuarial jimmy sept20

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