Actuarial Science Program & Sample Schedules
Sample Schedules - To give you an idea of which classes to take for each semester
Official Course Requirements (Bulletin depends on major)
Official Course Requirements (Bulletin depends on major)
Schedule Tool
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We are excited to announce a new tool to aid in long-term schedule planning! The schedule tool is an Excel workbook that puts all of your course requirements in one place, allows you to input your course plans, and automatically verifies that your course requirements have been met. Use the button to the right to view or download (File > Save As > Download a Copy) the tool. We recommend downloading for use - edits you make on the web will not be saved if you leave the page.
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Last Updated: 9/6/2020
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Scheduling can be complicated, and this tool may seem overwhelming. Fortunately, we have our VP Aidan Lake to show you the ropes! Check out his intro to the tool below.
We'd love to hear what you think so we can improve this tool. Please consider filling out our Schedule Tool Feedback Form.
Scheduling Basics
Which major MATH, STAT, or Actuarial Science (Business)?
You can major in Actuarial Science through The Actuarial Science Major, which can be found in the Smeal College of Business or the Mathematics and Statistics Majors (in the Eberly College of Science). Students in all three Actuarial Options take the same Actuarial courses with each other. There are advantages to getting the Major through Smeal, such as: Smeal students can take any STAT or MATH course, but Eberly students are not eligible for many Smeal courses. Take a look at the slides from our 2019 Fall Major Forum for Actuarial Students on what courses to take.
You can major in Actuarial Science through The Actuarial Science Major, which can be found in the Smeal College of Business or the Mathematics and Statistics Majors (in the Eberly College of Science). Students in all three Actuarial Options take the same Actuarial courses with each other. There are advantages to getting the Major through Smeal, such as: Smeal students can take any STAT or MATH course, but Eberly students are not eligible for many Smeal courses. Take a look at the slides from our 2019 Fall Major Forum for Actuarial Students on what courses to take.
Where to start MATH 140, MATH 141, or MATH 230?
Are you great at calculus? Click here to decide whether to place out of Math 140 (and maybe Math 141 too). It helps to place out of Math 140 so that you can take RM 410 in your Sophomore year. That helps you pass 2 actuarial exams in your Sophomore year and get an internship. However, Smeal students need to be careful to not thereby hurt their GPA, because if it goes below 3.20 you may not be able to enter your desired Smeal major.
Are you great at calculus? Click here to decide whether to place out of Math 140 (and maybe Math 141 too). It helps to place out of Math 140 so that you can take RM 410 in your Sophomore year. That helps you pass 2 actuarial exams in your Sophomore year and get an internship. However, Smeal students need to be careful to not thereby hurt their GPA, because if it goes below 3.20 you may not be able to enter your desired Smeal major.
What classes prepare you for Exam P (the first Actuarial exam)?
It's important to take STAT 414 and RM 214 (Review of Probability Theory) in your third semester, so you can get into RM 410 in the Spring, get an internship, learn about the actuarial profession, and pass the Society of Actuaries Exam P (on Probability Theory) in January,
It's important to take STAT 414 and RM 214 (Review of Probability Theory) in your third semester, so you can get into RM 410 in the Spring, get an internship, learn about the actuarial profession, and pass the Society of Actuaries Exam P (on Probability Theory) in January,
Which Risk Management (RM) Classes Do I Take?
Actuarial Science
Exam Related Courses:
-
RM 214
-
RM 410
-
RM 415
-
RM 411
-
RM 412
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>
Related Actuarial Exam: Probabilitly (P)
Important Notes: Take this concurrently with Stat 414 to prepare for Exam P. This course is not required, but recommended.
Tips from Students: You have the option to late drop this course if you aren't doing well in it, but try not to. Late dropping this course is a good indicator that the major may not be for you, as classes only get harder!
Course Description:
This course introduces students to actuarial science topics and the actuarial profession. To become an actuary, individuals must pass a series of professional examinations that accredit them as professionals in the field. This course provides an introduction to the material on the earlier exams such as applications of probability theory to insurance, financial mathematics (compound interest and annuities), and provides instruction on spreadsheets, so that students can perform their homework using them. Topics covered include applications of the following to insurance and actuarial science: conditional probability, independence, combinatorial principles, Bayes Theorem, and random variables. Specific probability distributions used include the binomial, uniform, Poisson, geometric, negative binomial, hyper-geometric, and multinomial discrete distributions, as well as the exponential, normal, uniform, and gamma continuous distributions. Expectations, distribution parameters, means, medians, modes, variances, skewness, and moment generating functions are also covered. The more advanced topics of joint, marginal, and conditional distributions are used, along with functions and transformations of random variables. The application of probability theory to risk management is addressed. Throughout the course, sample problems will be reviewed to help prepare students for the actuarial professional exams.
Important Notes: Take this concurrently with Stat 414 to prepare for Exam P. This course is not required, but recommended.
Tips from Students: You have the option to late drop this course if you aren't doing well in it, but try not to. Late dropping this course is a good indicator that the major may not be for you, as classes only get harder!
Course Description:
This course introduces students to actuarial science topics and the actuarial profession. To become an actuary, individuals must pass a series of professional examinations that accredit them as professionals in the field. This course provides an introduction to the material on the earlier exams such as applications of probability theory to insurance, financial mathematics (compound interest and annuities), and provides instruction on spreadsheets, so that students can perform their homework using them. Topics covered include applications of the following to insurance and actuarial science: conditional probability, independence, combinatorial principles, Bayes Theorem, and random variables. Specific probability distributions used include the binomial, uniform, Poisson, geometric, negative binomial, hyper-geometric, and multinomial discrete distributions, as well as the exponential, normal, uniform, and gamma continuous distributions. Expectations, distribution parameters, means, medians, modes, variances, skewness, and moment generating functions are also covered. The more advanced topics of joint, marginal, and conditional distributions are used, along with functions and transformations of random variables. The application of probability theory to risk management is addressed. Throughout the course, sample problems will be reviewed to help prepare students for the actuarial professional exams.
Related Actuarial Exam: Financial Mathematics (FM)
Important Notes: You MUST be accepted in the Smeal major to take this course
Tips from Students: Be sure to use the Adapt Lite subscription to its fullest! Its the best way to get ready for the real exam!
Course Description:
Compound interest and annuity functions; life annuities; equations of value; determination of yield rates; bonds; introduction to derivatives. R M 410 Financial Mathematics for Actuaries (3) The first section of the course focuses on Interest Theory, including compound interest, annuities- certain, and life annuities; equations of value; loans and their valuation; the pricing of bonds (with and without default), determining their yields to maturity and outstanding balances; determination of yield rates, spot rates, forward rates, and At-Par rates; duration of an asset or liability, and immunization of interest rate risk. The second section introduces students to derivatives, including the description, payoffs, and profits of forwards, futures, puts, calls, and swaps, and how to use them to manage a company's or investor's financial risks. The course helps prepare actuarial students for the international actuarial exam FM (Financial Mathematics).
Important Notes: You MUST be accepted in the Smeal major to take this course
Tips from Students: Be sure to use the Adapt Lite subscription to its fullest! Its the best way to get ready for the real exam!
Course Description:
Compound interest and annuity functions; life annuities; equations of value; determination of yield rates; bonds; introduction to derivatives. R M 410 Financial Mathematics for Actuaries (3) The first section of the course focuses on Interest Theory, including compound interest, annuities- certain, and life annuities; equations of value; loans and their valuation; the pricing of bonds (with and without default), determining their yields to maturity and outstanding balances; determination of yield rates, spot rates, forward rates, and At-Par rates; duration of an asset or liability, and immunization of interest rate risk. The second section introduces students to derivatives, including the description, payoffs, and profits of forwards, futures, puts, calls, and swaps, and how to use them to manage a company's or investor's financial risks. The course helps prepare actuarial students for the international actuarial exam FM (Financial Mathematics).
Related Actuarial Exam: Investments & Financial Markets (IFM)
Important Notes: In the fall semester, this course ends at Thanksgiving break
Course Description:
Modeling for Actuarial Science provides detailed actuary principles dealing with models of interest rates used to price liabilities, and models of stock prices and options used to price employee options and cash balance accounts. The first section of the course focuses on discrete models, such as binomial option pricing, which can be used for pricing employee stock options. The second section covers put-call parity, the effects of style, maturity, and strike price on option prices, generalized parity, and exchange options. The third section looks at continuous models such as: 1) the Black-Scholes formula and it's applications to options on stocks, currencies, futures, and market-making, 2) Delta-Hedging and the understanding of and pricing of exotic options (Asian, Barrier, Compound, Gap, and Exchange Options), 3) understanding lognormal distributions, Monte Carlo testing, Brownian motion, Ito's Lemma, historic and implied volatility, Sharpe ratios, interest rate models, and the application of these to liabilities. The course assists in preparing students for the international actuarial exam MFE (Models in Life Contingencies).
Important Notes: In the fall semester, this course ends at Thanksgiving break
Course Description:
Modeling for Actuarial Science provides detailed actuary principles dealing with models of interest rates used to price liabilities, and models of stock prices and options used to price employee options and cash balance accounts. The first section of the course focuses on discrete models, such as binomial option pricing, which can be used for pricing employee stock options. The second section covers put-call parity, the effects of style, maturity, and strike price on option prices, generalized parity, and exchange options. The third section looks at continuous models such as: 1) the Black-Scholes formula and it's applications to options on stocks, currencies, futures, and market-making, 2) Delta-Hedging and the understanding of and pricing of exotic options (Asian, Barrier, Compound, Gap, and Exchange Options), 3) understanding lognormal distributions, Monte Carlo testing, Brownian motion, Ito's Lemma, historic and implied volatility, Sharpe ratios, interest rate models, and the application of these to liabilities. The course assists in preparing students for the international actuarial exam MFE (Models in Life Contingencies).
Related Actuarial Exam: Long Term Actuarial Mathematics (LTAM) *first half of exam syllabus
Important Notes: Offered spring only
Course Description:
A study of the mathematical theory of life contingencies, single-life functions, and their applications. The course provides a solid understanding of the mathematics of life insurance and annuities, and helps actuarial students prepare for the international MLC actuarial exam (Models in Life Contingencies). Students will produce a paper on selling insurance to someone they know, which includes pricing it based on the person's age and gender. Topics covered include: 1) The mathematics, statistics, and interest theory supporting life contingencies, 2) In depth study of survival models and mortality tables, including Select, Ultimate, and Aggregate Mortality, 3) Pricing and understanding life insurance, and in particular, Whole Life Insurance, Endowment Insurance, and Term Insurance, 4) Pricing and understanding life annuities, including temporary and deferred annuities, 5) Determination and understanding of premiums for life insurance and annuities, and 6) Determination and understanding of life insurance reserves, and multiple ways of calculating them.
Important Notes: Offered spring only
Course Description:
A study of the mathematical theory of life contingencies, single-life functions, and their applications. The course provides a solid understanding of the mathematics of life insurance and annuities, and helps actuarial students prepare for the international MLC actuarial exam (Models in Life Contingencies). Students will produce a paper on selling insurance to someone they know, which includes pricing it based on the person's age and gender. Topics covered include: 1) The mathematics, statistics, and interest theory supporting life contingencies, 2) In depth study of survival models and mortality tables, including Select, Ultimate, and Aggregate Mortality, 3) Pricing and understanding life insurance, and in particular, Whole Life Insurance, Endowment Insurance, and Term Insurance, 4) Pricing and understanding life annuities, including temporary and deferred annuities, 5) Determination and understanding of premiums for life insurance and annuities, and 6) Determination and understanding of life insurance reserves, and multiple ways of calculating them.
Related Actuarial Exam: Long Term Actuarial Mathematics (LTAM) *second half of exam syllabus
Course Description:
Joint-life and survivor-life functions, population life tables, and multiple decrement theory, with applications to disability and retirement problems.
Course Description:
Joint-life and survivor-life functions, population life tables, and multiple decrement theory, with applications to disability and retirement problems.
Other RM Courses:
-
RM 320W
-
RM 420
-
RM 430
<
>
Course Description:
Goals and methods of risk management. Commercial insurance and alternative risk transfer (ART) methods in addition to the characteristics of insurance markets and intermediaries used by risk managers. This course covers the risk management process used by organizations to deal with the risks that they face with an emphasis on the types of risk commonly handled through the commercial insurance market. It addresses the costs and benefits of risk management, the goals of the process and the methods available to handle risks. The methods covered include both traditional and nontraditional ones including retention, commercial insurance, captive insurers, loss sensitive contracts, finite risk plans and securitization. The characteristics of the insurance markets and intermediaries used by risk managers are studied. These include insurance company organizational forms, operational structures, measures of performance, regulation and the role of brokers. The risks to organizations that are addressed include risks to employees, risks to customers, risks to shareholders and risks to third parties. The types of insurance covered include workers compensation, employment practices liability, products liability, general liability, directors and officers liability and environmental impairment liability. In addition, the failure of risk management during the recent financial crisis is analyzed. The course ends with a case study of risk management at Penn State University to give students a detailed perspective of the risk management program of a complex organization and to provide insight into how changes in the market environment can significantly affect such a program.
Goals and methods of risk management. Commercial insurance and alternative risk transfer (ART) methods in addition to the characteristics of insurance markets and intermediaries used by risk managers. This course covers the risk management process used by organizations to deal with the risks that they face with an emphasis on the types of risk commonly handled through the commercial insurance market. It addresses the costs and benefits of risk management, the goals of the process and the methods available to handle risks. The methods covered include both traditional and nontraditional ones including retention, commercial insurance, captive insurers, loss sensitive contracts, finite risk plans and securitization. The characteristics of the insurance markets and intermediaries used by risk managers are studied. These include insurance company organizational forms, operational structures, measures of performance, regulation and the role of brokers. The risks to organizations that are addressed include risks to employees, risks to customers, risks to shareholders and risks to third parties. The types of insurance covered include workers compensation, employment practices liability, products liability, general liability, directors and officers liability and environmental impairment liability. In addition, the failure of risk management during the recent financial crisis is analyzed. The course ends with a case study of risk management at Penn State University to give students a detailed perspective of the risk management program of a complex organization and to provide insight into how changes in the market environment can significantly affect such a program.
Related Actuarial Exam: Short Term Actuarial Mathematics (STAM)
Course Description:
Actuarial methods and concepts used to model property, casualty and health insurance losses along with credibility theory. RM 420 Property, Casualty, and Health Insurance (3) This course provides a solid understanding of actuarial methods and concepts used to develop loss models for property and casualty insurance and health insurance. The course makes use of real world numerical examples in order to demonstrate how actuaries use historical claims and pricing data, both company specific and industry, to determine rates and increases. The class also gives students a foundation in Credibility Theory and simulation to prepare for the actuarial examination on loss models.
Course Description:
Actuarial methods and concepts used to model property, casualty and health insurance losses along with credibility theory. RM 420 Property, Casualty, and Health Insurance (3) This course provides a solid understanding of actuarial methods and concepts used to develop loss models for property and casualty insurance and health insurance. The course makes use of real world numerical examples in order to demonstrate how actuaries use historical claims and pricing data, both company specific and industry, to determine rates and increases. The class also gives students a foundation in Credibility Theory and simulation to prepare for the actuarial examination on loss models.
Course Description:
Industrial organization of the US life-health insurance industry; economic issues related to organizational structure, operational functions, and the supply and demand for life-health products.
Industrial organization of the US life-health insurance industry; economic issues related to organizational structure, operational functions, and the supply and demand for life-health products.
Actuarial Mathematics
Exam Related Courses:
-
RM 214
-
RM 410
-
RM 415
-
RM 411
-
RM 412
<
>
Related Actuarial Exam: Probabilitly (P)
Important Notes: Take this concurrently with Stat 414 to prepare for Exam P. This course is not required, but recommended.
Tips from Students: You have the option to late drop this course if you aren't doing well in it, but try not to. Late dropping this course is a good indicator that the major may not be for you, as classes only get harder!
Course Description:
This course introduces students to actuarial science topics and the actuarial profession. To become an actuary, individuals must pass a series of professional examinations that accredit them as professionals in the field. This course provides an introduction to the material on the earlier exams such as applications of probability theory to insurance, financial mathematics (compound interest and annuities), and provides instruction on spreadsheets, so that students can perform their homework using them. Topics covered include applications of the following to insurance and actuarial science: conditional probability, independence, combinatorial principles, Bayes Theorem, and random variables. Specific probability distributions used include the binomial, uniform, Poisson, geometric, negative binomial, hyper-geometric, and multinomial discrete distributions, as well as the exponential, normal, uniform, and gamma continuous distributions. Expectations, distribution parameters, means, medians, modes, variances, skewness, and moment generating functions are also covered. The more advanced topics of joint, marginal, and conditional distributions are used, along with functions and transformations of random variables. The application of probability theory to risk management is addressed. Throughout the course, sample problems will be reviewed to help prepare students for the actuarial professional exams.
Important Notes: Take this concurrently with Stat 414 to prepare for Exam P. This course is not required, but recommended.
Tips from Students: You have the option to late drop this course if you aren't doing well in it, but try not to. Late dropping this course is a good indicator that the major may not be for you, as classes only get harder!
Course Description:
This course introduces students to actuarial science topics and the actuarial profession. To become an actuary, individuals must pass a series of professional examinations that accredit them as professionals in the field. This course provides an introduction to the material on the earlier exams such as applications of probability theory to insurance, financial mathematics (compound interest and annuities), and provides instruction on spreadsheets, so that students can perform their homework using them. Topics covered include applications of the following to insurance and actuarial science: conditional probability, independence, combinatorial principles, Bayes Theorem, and random variables. Specific probability distributions used include the binomial, uniform, Poisson, geometric, negative binomial, hyper-geometric, and multinomial discrete distributions, as well as the exponential, normal, uniform, and gamma continuous distributions. Expectations, distribution parameters, means, medians, modes, variances, skewness, and moment generating functions are also covered. The more advanced topics of joint, marginal, and conditional distributions are used, along with functions and transformations of random variables. The application of probability theory to risk management is addressed. Throughout the course, sample problems will be reviewed to help prepare students for the actuarial professional exams.
Related Actuarial Exam: Financial Mathematics (FM)
Tips from Students: Be sure to use the Adapt Lite subscription to its fullest! Its the best way to get ready for the real exam!
Course Description:
Compound interest and annuity functions; life annuities; equations of value; determination of yield rates; bonds; introduction to derivatives. R M 410 Financial Mathematics for Actuaries (3) The first section of the course focuses on Interest Theory, including compound interest, annuities- certain, and life annuities; equations of value; loans and their valuation; the pricing of bonds (with and without default), determining their yields to maturity and outstanding balances; determination of yield rates, spot rates, forward rates, and At-Par rates; duration of an asset or liability, and immunization of interest rate risk. The second section introduces students to derivatives, including the description, payoffs, and profits of forwards, futures, puts, calls, and swaps, and how to use them to manage a company's or investor's financial risks. The course helps prepare actuarial students for the international actuarial exam FM (Financial Mathematics).
Tips from Students: Be sure to use the Adapt Lite subscription to its fullest! Its the best way to get ready for the real exam!
Course Description:
Compound interest and annuity functions; life annuities; equations of value; determination of yield rates; bonds; introduction to derivatives. R M 410 Financial Mathematics for Actuaries (3) The first section of the course focuses on Interest Theory, including compound interest, annuities- certain, and life annuities; equations of value; loans and their valuation; the pricing of bonds (with and without default), determining their yields to maturity and outstanding balances; determination of yield rates, spot rates, forward rates, and At-Par rates; duration of an asset or liability, and immunization of interest rate risk. The second section introduces students to derivatives, including the description, payoffs, and profits of forwards, futures, puts, calls, and swaps, and how to use them to manage a company's or investor's financial risks. The course helps prepare actuarial students for the international actuarial exam FM (Financial Mathematics).
Related Actuarial Exam: Investments & Financial Markets (IFM)
Important Notes: NOT required for this major, but it is recommended to take to better prepare for IFM. In the fall semester, this course ends at Thanksgiving break.
Course Description:
Modeling for Actuarial Science provides detailed actuary principles dealing with models of interest rates used to price liabilities, and models of stock prices and options used to price employee options and cash balance accounts. The first section of the course focuses on discrete models, such as binomial option pricing, which can be used for pricing employee stock options. The second section covers put-call parity, the effects of style, maturity, and strike price on option prices, generalized parity, and exchange options. The third section looks at continuous models such as: 1) the Black-Scholes formula and it's applications to options on stocks, currencies, futures, and market-making, 2) Delta-Hedging and the understanding of and pricing of exotic options (Asian, Barrier, Compound, Gap, and Exchange Options), 3) understanding lognormal distributions, Monte Carlo testing, Brownian motion, Ito's Lemma, historic and implied volatility, Sharpe ratios, interest rate models, and the application of these to liabilities. The course assists in preparing students for the international actuarial exam MFE (Models in Life Contingencies).
Important Notes: NOT required for this major, but it is recommended to take to better prepare for IFM. In the fall semester, this course ends at Thanksgiving break.
Course Description:
Modeling for Actuarial Science provides detailed actuary principles dealing with models of interest rates used to price liabilities, and models of stock prices and options used to price employee options and cash balance accounts. The first section of the course focuses on discrete models, such as binomial option pricing, which can be used for pricing employee stock options. The second section covers put-call parity, the effects of style, maturity, and strike price on option prices, generalized parity, and exchange options. The third section looks at continuous models such as: 1) the Black-Scholes formula and it's applications to options on stocks, currencies, futures, and market-making, 2) Delta-Hedging and the understanding of and pricing of exotic options (Asian, Barrier, Compound, Gap, and Exchange Options), 3) understanding lognormal distributions, Monte Carlo testing, Brownian motion, Ito's Lemma, historic and implied volatility, Sharpe ratios, interest rate models, and the application of these to liabilities. The course assists in preparing students for the international actuarial exam MFE (Models in Life Contingencies).
Related Actuarial Exam: Long Term Actuarial Mathematics (LTAM) *first half of exam syllabus
Course Description:
A study of the mathematical theory of life contingencies, single-life functions, and their applications. The course provides a solid understanding of the mathematics of life insurance and annuities, and helps actuarial students prepare for the international MLC actuarial exam (Models in Life Contingencies). Students will produce a paper on selling insurance to someone they know, which includes pricing it based on the person's age and gender. Topics covered include: 1) The mathematics, statistics, and interest theory supporting life contingencies, 2) In depth study of survival models and mortality tables, including Select, Ultimate, and Aggregate Mortality, 3) Pricing and understanding life insurance, and in particular, Whole Life Insurance, Endowment Insurance, and Term Insurance, 4) Pricing and understanding life annuities, including temporary and deferred annuities, 5) Determination and understanding of premiums for life insurance and annuities, and 6) Determination and understanding of life insurance reserves, and multiple ways of calculating them.
Course Description:
A study of the mathematical theory of life contingencies, single-life functions, and their applications. The course provides a solid understanding of the mathematics of life insurance and annuities, and helps actuarial students prepare for the international MLC actuarial exam (Models in Life Contingencies). Students will produce a paper on selling insurance to someone they know, which includes pricing it based on the person's age and gender. Topics covered include: 1) The mathematics, statistics, and interest theory supporting life contingencies, 2) In depth study of survival models and mortality tables, including Select, Ultimate, and Aggregate Mortality, 3) Pricing and understanding life insurance, and in particular, Whole Life Insurance, Endowment Insurance, and Term Insurance, 4) Pricing and understanding life annuities, including temporary and deferred annuities, 5) Determination and understanding of premiums for life insurance and annuities, and 6) Determination and understanding of life insurance reserves, and multiple ways of calculating them.
Related Actuarial Exam: Long Term Actuarial Mathematics (LTAM) *second half of exam syllabus
Course Description:
Joint-life and survivor-life functions, population life tables, and multiple decrement theory, with applications to disability and retirement problems.
Course Description:
Joint-life and survivor-life functions, population life tables, and multiple decrement theory, with applications to disability and retirement problems.
Other RM Courses:
-
RM 302
-
RM 420
-
RM 430
<
>
Course Description:
Introduction to the principles and methods of handling business and personal risks; emphasis on insurance techniques.
Introduction to the principles and methods of handling business and personal risks; emphasis on insurance techniques.
Related Actuarial Exam: Short Term Actuarial Mathematics (STAM)
Course Description:
Actuarial methods and concepts used to model property, casualty and health insurance losses along with credibility theory. RM 420 Property, Casualty, and Health Insurance (3) This course provides a solid understanding of actuarial methods and concepts used to develop loss models for property and casualty insurance and health insurance. The course makes use of real world numerical examples in order to demonstrate how actuaries use historical claims and pricing data, both company specific and industry, to determine rates and increases. The class also gives students a foundation in Credibility Theory and simulation to prepare for the actuarial examination on loss models.
Course Description:
Actuarial methods and concepts used to model property, casualty and health insurance losses along with credibility theory. RM 420 Property, Casualty, and Health Insurance (3) This course provides a solid understanding of actuarial methods and concepts used to develop loss models for property and casualty insurance and health insurance. The course makes use of real world numerical examples in order to demonstrate how actuaries use historical claims and pricing data, both company specific and industry, to determine rates and increases. The class also gives students a foundation in Credibility Theory and simulation to prepare for the actuarial examination on loss models.
Course Description:
Industrial organization of the US life-health insurance industry; economic issues related to organizational structure, operational functions, and the supply and demand for life-health products.
Industrial organization of the US life-health insurance industry; economic issues related to organizational structure, operational functions, and the supply and demand for life-health products.
Actuarial Statistics
Exam Related Courses:
-
RM 214
-
RM 410
-
RM 415
-
RM 411
-
RM 412
<
>
Related Actuarial Exam: Probabilitly (P)
Important Notes: Take this concurrently with Stat 414 to prepare for Exam P. This course is not required, but recommended.
Tips from Students: You have the option to late drop this course if you aren't doing well in it, but try not to. Late dropping this course is a good indicator that the major may not be for you, as classes only get harder!
Course Description:
This course introduces students to actuarial science topics and the actuarial profession. To become an actuary, individuals must pass a series of professional examinations that accredit them as professionals in the field. This course provides an introduction to the material on the earlier exams such as applications of probability theory to insurance, financial mathematics (compound interest and annuities), and provides instruction on spreadsheets, so that students can perform their homework using them. Topics covered include applications of the following to insurance and actuarial science: conditional probability, independence, combinatorial principles, Bayes Theorem, and random variables. Specific probability distributions used include the binomial, uniform, Poisson, geometric, negative binomial, hyper-geometric, and multinomial discrete distributions, as well as the exponential, normal, uniform, and gamma continuous distributions. Expectations, distribution parameters, means, medians, modes, variances, skewness, and moment generating functions are also covered. The more advanced topics of joint, marginal, and conditional distributions are used, along with functions and transformations of random variables. The application of probability theory to risk management is addressed. Throughout the course, sample problems will be reviewed to help prepare students for the actuarial professional exams.
Important Notes: Take this concurrently with Stat 414 to prepare for Exam P. This course is not required, but recommended.
Tips from Students: You have the option to late drop this course if you aren't doing well in it, but try not to. Late dropping this course is a good indicator that the major may not be for you, as classes only get harder!
Course Description:
This course introduces students to actuarial science topics and the actuarial profession. To become an actuary, individuals must pass a series of professional examinations that accredit them as professionals in the field. This course provides an introduction to the material on the earlier exams such as applications of probability theory to insurance, financial mathematics (compound interest and annuities), and provides instruction on spreadsheets, so that students can perform their homework using them. Topics covered include applications of the following to insurance and actuarial science: conditional probability, independence, combinatorial principles, Bayes Theorem, and random variables. Specific probability distributions used include the binomial, uniform, Poisson, geometric, negative binomial, hyper-geometric, and multinomial discrete distributions, as well as the exponential, normal, uniform, and gamma continuous distributions. Expectations, distribution parameters, means, medians, modes, variances, skewness, and moment generating functions are also covered. The more advanced topics of joint, marginal, and conditional distributions are used, along with functions and transformations of random variables. The application of probability theory to risk management is addressed. Throughout the course, sample problems will be reviewed to help prepare students for the actuarial professional exams.
Related Actuarial Exam: Financial Mathematics (FM)
Important Notes: You MUST be accepted in the Smeal major to take this course
Tips from Students: Be sure to use the Adapt Lite subscription to its fullest! Its the best way to get ready for the real exam!
Course Description:
Compound interest and annuity functions; life annuities; equations of value; determination of yield rates; bonds; introduction to derivatives. R M 410 Financial Mathematics for Actuaries (3) The first section of the course focuses on Interest Theory, including compound interest, annuities- certain, and life annuities; equations of value; loans and their valuation; the pricing of bonds (with and without default), determining their yields to maturity and outstanding balances; determination of yield rates, spot rates, forward rates, and At-Par rates; duration of an asset or liability, and immunization of interest rate risk. The second section introduces students to derivatives, including the description, payoffs, and profits of forwards, futures, puts, calls, and swaps, and how to use them to manage a company's or investor's financial risks. The course helps prepare actuarial students for the international actuarial exam FM (Financial Mathematics).
Important Notes: You MUST be accepted in the Smeal major to take this course
Tips from Students: Be sure to use the Adapt Lite subscription to its fullest! Its the best way to get ready for the real exam!
Course Description:
Compound interest and annuity functions; life annuities; equations of value; determination of yield rates; bonds; introduction to derivatives. R M 410 Financial Mathematics for Actuaries (3) The first section of the course focuses on Interest Theory, including compound interest, annuities- certain, and life annuities; equations of value; loans and their valuation; the pricing of bonds (with and without default), determining their yields to maturity and outstanding balances; determination of yield rates, spot rates, forward rates, and At-Par rates; duration of an asset or liability, and immunization of interest rate risk. The second section introduces students to derivatives, including the description, payoffs, and profits of forwards, futures, puts, calls, and swaps, and how to use them to manage a company's or investor's financial risks. The course helps prepare actuarial students for the international actuarial exam FM (Financial Mathematics).
Related Actuarial Exam: Investments & Financial Markets (IFM)
Important Notes: NOT required for this major, but it is recommended to take to better prepare for IFM. In the fall semester, this course ends at Thanksgiving break.
Course Description:
Modeling for Actuarial Science provides detailed actuary principles dealing with models of interest rates used to price liabilities, and models of stock prices and options used to price employee options and cash balance accounts. The first section of the course focuses on discrete models, such as binomial option pricing, which can be used for pricing employee stock options. The second section covers put-call parity, the effects of style, maturity, and strike price on option prices, generalized parity, and exchange options. The third section looks at continuous models such as: 1) the Black-Scholes formula and it's applications to options on stocks, currencies, futures, and market-making, 2) Delta-Hedging and the understanding of and pricing of exotic options (Asian, Barrier, Compound, Gap, and Exchange Options), 3) understanding lognormal distributions, Monte Carlo testing, Brownian motion, Ito's Lemma, historic and implied volatility, Sharpe ratios, interest rate models, and the application of these to liabilities. The course assists in preparing students for the international actuarial exam MFE (Models in Life Contingencies).
Important Notes: NOT required for this major, but it is recommended to take to better prepare for IFM. In the fall semester, this course ends at Thanksgiving break.
Course Description:
Modeling for Actuarial Science provides detailed actuary principles dealing with models of interest rates used to price liabilities, and models of stock prices and options used to price employee options and cash balance accounts. The first section of the course focuses on discrete models, such as binomial option pricing, which can be used for pricing employee stock options. The second section covers put-call parity, the effects of style, maturity, and strike price on option prices, generalized parity, and exchange options. The third section looks at continuous models such as: 1) the Black-Scholes formula and it's applications to options on stocks, currencies, futures, and market-making, 2) Delta-Hedging and the understanding of and pricing of exotic options (Asian, Barrier, Compound, Gap, and Exchange Options), 3) understanding lognormal distributions, Monte Carlo testing, Brownian motion, Ito's Lemma, historic and implied volatility, Sharpe ratios, interest rate models, and the application of these to liabilities. The course assists in preparing students for the international actuarial exam MFE (Models in Life Contingencies).
Related Actuarial Exam: Long Term Actuarial Mathematics (LTAM) *first half of exam syllabus
Course Description:
A study of the mathematical theory of life contingencies, single-life functions, and their applications. The course provides a solid understanding of the mathematics of life insurance and annuities, and helps actuarial students prepare for the international MLC actuarial exam (Models in Life Contingencies). Students will produce a paper on selling insurance to someone they know, which includes pricing it based on the person's age and gender. Topics covered include: 1) The mathematics, statistics, and interest theory supporting life contingencies, 2) In depth study of survival models and mortality tables, including Select, Ultimate, and Aggregate Mortality, 3) Pricing and understanding life insurance, and in particular, Whole Life Insurance, Endowment Insurance, and Term Insurance, 4) Pricing and understanding life annuities, including temporary and deferred annuities, 5) Determination and understanding of premiums for life insurance and annuities, and 6) Determination and understanding of life insurance reserves, and multiple ways of calculating them.
Course Description:
A study of the mathematical theory of life contingencies, single-life functions, and their applications. The course provides a solid understanding of the mathematics of life insurance and annuities, and helps actuarial students prepare for the international MLC actuarial exam (Models in Life Contingencies). Students will produce a paper on selling insurance to someone they know, which includes pricing it based on the person's age and gender. Topics covered include: 1) The mathematics, statistics, and interest theory supporting life contingencies, 2) In depth study of survival models and mortality tables, including Select, Ultimate, and Aggregate Mortality, 3) Pricing and understanding life insurance, and in particular, Whole Life Insurance, Endowment Insurance, and Term Insurance, 4) Pricing and understanding life annuities, including temporary and deferred annuities, 5) Determination and understanding of premiums for life insurance and annuities, and 6) Determination and understanding of life insurance reserves, and multiple ways of calculating them.
Related Actuarial Exam: Long Term Actuarial Mathematics (LTAM) *second half of exam syllabus
Course Description:
Joint-life and survivor-life functions, population life tables, and multiple decrement theory, with applications to disability and retirement problems.
Course Description:
Joint-life and survivor-life functions, population life tables, and multiple decrement theory, with applications to disability and retirement problems.
Other RM Courses:
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RM 302
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RM 420
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RM 430
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Course Description:
Introduction to the principles and methods of handling business and personal risks; emphasis on insurance techniques.
Introduction to the principles and methods of handling business and personal risks; emphasis on insurance techniques.
Related Actuarial Exam: Short Term Actuarial Mathematics (STAM)
Course Description:
Actuarial methods and concepts used to model property, casualty and health insurance losses along with credibility theory. RM 420 Property, Casualty, and Health Insurance (3) This course provides a solid understanding of actuarial methods and concepts used to develop loss models for property and casualty insurance and health insurance. The course makes use of real world numerical examples in order to demonstrate how actuaries use historical claims and pricing data, both company specific and industry, to determine rates and increases. The class also gives students a foundation in Credibility Theory and simulation to prepare for the actuarial examination on loss models.
Course Description:
Actuarial methods and concepts used to model property, casualty and health insurance losses along with credibility theory. RM 420 Property, Casualty, and Health Insurance (3) This course provides a solid understanding of actuarial methods and concepts used to develop loss models for property and casualty insurance and health insurance. The course makes use of real world numerical examples in order to demonstrate how actuaries use historical claims and pricing data, both company specific and industry, to determine rates and increases. The class also gives students a foundation in Credibility Theory and simulation to prepare for the actuarial examination on loss models.
Course Description:
Industrial organization of the US life-health insurance industry; economic issues related to organizational structure, operational functions, and the supply and demand for life-health products.
Industrial organization of the US life-health insurance industry; economic issues related to organizational structure, operational functions, and the supply and demand for life-health products.
Actuarial Science classes are the same across majors: MATH, STAT, RM
- RM 214 is an elective to take with STAT 414 to pass Exam P.
- RM 410 prepares you for Exam FM.
- RM 415 may only be offered in the fall. (Exam IFM)
- RM 411 is offered in the spring semester only. (Exam LTAM Part I)
- RM 412 is offered in the fall semester only. (Exam LTAM Part II)
- RM 420 is offered in the spring semester only (Exam STAM).
- Smeal Students: To enter your major by the end of 3rd semester, you must meet all ETM requirements (ACCTG 211, FIN 301, 3.2 GPA or better and 44+ credits at Penn State). Then you can take RM 410 in 4th semester and RM 415 in 5th semester. (This helps you pass 2 exams in your sophomore year, get an internship, and pass the IFM exam in the fall of junior year.)
- Consider a STAT minor; it only requires 2 additional classes: STAT 480 and STAT 416.
Validation by Educational Experience (VEEs)
VEEs are part of the actuarial certification process. If you do not receive credit in college, you may need to pay for and enroll in additional courses to receive the credit. For that reason, it is important to take these courses even if not required to graduate. The VEE requirements for the actuarial profession include: Economics; Accounting and Finance; Mathematical Statistics. These VEEs can be satified by the following courses, respectively: Economics 102 and Economics 104; Account 211 and Finance 301; Statistics 415. For this reason, many actuarial students minor in Statistics or Economics.
For more details, read about VEE courses on the SOA Website or our VEE/Exams page
For more details, read about VEE courses on the SOA Website or our VEE/Exams page
General Education Requirements
Courses required for graduation:
- Writing/Speaking (GWS) - 9 credits
- Quantification (GQ) – 6 credits
- Health and Physical Activity (GHA) – 3 credits
- Natural Sciences (GN) – 9 credits
- Arts (GA) – 6 credits
- Humanities (GH) – 6 credits
- Social & Behavioral Sciences (GS) – 6 credits
- Integrative (Inter-Domain (N) or Linked Courses) – 6 credits
- United States (US) Cultures – 3 credits (pick a GA/GH/GS that is also a US)
- International (IL) Cultures – 3 credits (pick a GA/GH/GS that is also a IL)