IAI Actuarial Core Principles study guide
Every chapter of all four papers, broken into 631 topics. Each topic shows the concept, a step-by-step way to solve questions, the quickest method for the exam, the mistakes students make and worked examples.
Paper CS1: Actuarial Statistics
Subjective, written · 15 chaptersBasic univariate distributions and generating samples
- Discrete Distributions: Binomial, Poisson, Geometric
- Continuous Distributions: Normal, Lognormal, Exponential, Gamma
- Uniform Distribution and Distribution Properties
- Generating Random Samples: Inverse Transform Method
- Acceptance-Rejection and Other Simulation Methods
- Simulation Accuracy and Number of Simulations
Paper CS2: Risk Modelling and Survival Analysis
Subjective, written · 16 chaptersPaper CM1: Actuarial Mathematics for Modelling
Subjective, written · 21 chaptersProjecting expected future cashflows and profit testing
- Profit Testing Basics and Cashflow Projection
- Profit Vector, Profit Signature and Discounted Profit
- Profit Measures: NPV, Profit Margin, IRR and Payback
- Reserves in Profit Testing and Zeroisation
- Risk Discount Rate and Cost of Capital
- Pricing Using Profit Tests and Sensitivity Analysis
- Unit-Linked and Multiple-State Profit Tests
Paper CM2: Economic Modelling
Subjective, written · 16 chaptersValuing benefit guarantees using simulation
- Benefit Guarantees in Insurance Contracts
- Guarantees as Options and Black-Scholes Valuation
- Stochastic Asset Models and Scenario Generation
- Monte Carlo Simulation of Guarantee Costs
- Risk-Neutral vs Real-World Valuation
- Accuracy, Variance Reduction and Nested Simulation
- Hedging and Management of Guarantees
Binomial option-pricing model
- Options Basics and Payoff Diagrams
- No-Arbitrage Principle and Put-Call Parity
- One-Period Binomial Model and Replicating Portfolio
- Risk-Neutral Valuation and Risk-Neutral Probabilities
- Multi-Period Binomial Trees
- American Options and Early Exercise in Binomial Trees
- Calibrating u and d and Link to Black-Scholes
Black-Scholes derivative-pricing model
- Black-Scholes Assumptions and Limitations
- Geometric Brownian Motion and Lognormal Share Prices
- Black-Scholes Formula for European Calls and Puts
- Risk-Neutral Valuation and the Black-Scholes PDE
- The Greeks and Hedging
- Volatility: Historical, Implied and Smile
- Extensions: Dividends, Currencies and Other Underlyings
Paper CB1: Business Finance
Subjective, written · 12 chaptersConstruction and features of company accounts and reports
- Purpose and Users of Company Accounts
- Financial Reporting Framework and Accounting Principles
- Statement of Financial Position (Balance Sheet)
- Statement of Profit or Loss and Comprehensive Income
- Cash Flow Statement
- Statement of Changes in Equity and Notes to Accounts
- Directors' Report and Audit Report
- Group Accounts and Consolidation Basics
Paper CB2: Business Economics
Subjective, written · 21 chaptersRecent macroeconomic history
- Post-War Economic Order and Bretton Woods
- 1970s Stagflation and the Oil Shocks
- Monetarism and the Neoliberal Turn
- The Great Moderation and Inflation Targeting
- Financial Crises of the 1990s: Asia, Japan and Emerging Markets
- The 2007-08 Global Financial Crisis
- Post-Crisis Policy: QE, Austerity and Eurozone Crisis
- COVID-19 Shock, Inflation Surge and Recent Developments
Paper CB3: Business Management
Subjective, written · 17 chaptersTrusts and agency
- Nature and Types of Trusts
- Creation and Requirements of a Valid Trust
- Trustees: Duties, Powers and Liabilities
- Rights of Beneficiaries and Trust Remedies
- Law of Agency: Creation and Types of Agents
- Authority, Duties and Liability of Agent and Principal
- Fiduciary Duty and Conflicts of Interest for Actuaries