April 2013 exam

[SpeakLife!]

I'm trying to remember the questions and point values. Here's what I think I remember:

1 - ??? points
a How have govt regulators protected (or can protect?) financial services companies
b Effect of companies taking into account other stakeholders besides govt regulators

2 - 7 points
a Describe risk map (5)
b give examples and draw (2)

3 - 21 points
Solvanian college
a describe risks (18)
b stress test examples (3)

4 - 27 points
SLAS life insurer
a defn of longevity risk (1)
b how to manage longevity risk (8)
c provide profit profile of swap (4)
d adv and disadvantages to SLAS of swap structure (10)
e why not buy reinsurance (4)

5 - 10 points
Southwest Re
a copula calculation (4 points--I think I got 95.x% for this)
b why/not hold capital for these reinsurance treaties (6)

6 - ??? points
liquidity risk
something about describe major reason why banks have failed?

7 - 11 or 13 points
financial adviser and bonds
a points to make to client based on initial calculations (5)
b list processes of new calcs (2)
c interpret results (2)
d points to make to client based on new calcs (2/4?)

I believe part a of question 3, at 18 points, is the highest valued subpart asked to date on an ST9 exam.

Overall, I thought the exam seemed pretty balanced and tested a lot of key concepts. However, it took sooo long to read through those two Solvanian questions! Despite this, the exam seemed fair. We'll see what happens!

What did others think?

 

[Zebedee]

Seems like a pretty good recollection. When do they publish the paper these days? "Back in my day" the paper was uploaded pretty much the next day so you could over-analyse to your heart's content if you so wished. I thought the paper was ok on balance.

Agree there was a lot of reading to process with some of the questions. Also, if I remember correctly two of the questions were based in same named country, but it wasn't clear to me if we could take the information provided in each question and apply it to both questions. Whether you could or you couldn't then I don't think that was a reasonable thing for the examiners to do. If they intended us to use the info in both then they should have been two parts of one question. If they didn't then they should have used different country names.

The 18 mark question on the risks to the lending bank (only) was a beast. The bank's risks surely don't go much beyond counterparty credit risk. I was able to make more distinct and obviously valid points on some of the 4 mark questions than I could with that one. Maybe we were expected to eke out marks by discussing all the risks that other stakeholders were exposed to and how they might increase the bank's counterparty credit risk?

The final question seemed to make a huge assumption that the financial adviser was a highly numerically literate professional, and not a commission hungry saleman looking for a fast buck. Is this the retail distribution review already in effect! ;-)

Best of luck.

 

[CooCoo4Calcs]

Question 6 was on liquidity risk, if I remember correctly, and question 5 was the copula question.

On the whole, a very fair paper. Working through the exam, it felt a lot like CA1 on steroids. Other than the quantitative question and identifying which models / processes were used in the last bond question, there was not a lot which linked directly to the course material and I felt could be answered by most actuaries / analysts with some experience in risk management.

Mark allocations seemed quite high for some questions - 8 marks on managing longevity risk, 6 (?) marks on consequences of liquidity crystallisation.. not to point out the 18 mark elephant in the room.

I'm just hoping that my strategy of attempting all the questions with a fair distribution of time reflects "well balanced" knowledge!

 

[CooCoo4Calcs]

How did everyone fare?

 

[Riot2]

I passed.

I still think the exam was _too_ similar to a CA1 exam though.

If you studied CA1 recently you only needed to study the copula chapter and you would have had about the same chance of passing as someone who studied all the ST9 material.

 

[CooCoo4Calcs]

I agree completely. I'm glad I studied all the ST9 material the way I did, because I found it very useful and interesting, but it was a bit of a shock to see so little of it being actively examined.

But I passed, so I shouldn't complain

 

[Edwin]

Disappointed with the CA1ness of the paper but carrying on.....ran into a little time issues cause of having given question 3 and 4 the time they deserved.