Well, night before exam. Have to say I am pretty disappointed with this course, didn't learn anything useful and it seems to be mainly a book work course learning about the views of the author (which are often very subjective). Here are some observations from ST5 that illustrates why the banking sector may be justified in their view that actuaries don't quite get investment... "Difficulties with VaR": 1. Usually assumes normally distributed returns - NO IT DOESN'T! Most people use VaR everyday with all kinds of distributions... 2. Doesn't allow for changes in parameters in times of extreme market conditions - what on does this have to do with VaR? Just because you pick a bad model doesn't mean the problem is with VaR. Why not keep with VaR and use for example a regime shifting jump diffusion model for equity return? Why do we mention odd downside risk measures like "downside semi standard deviation" (name one regulator or firm who uses this) when we forget to mention TVaR and EPD??? When we talk of difficulties with a risk measure why not mention important things like subadditivity, robustness, etc rather than invent the above non-issues?? Come on IoA you can do better than this, let's try to give actuaries a good name in this field. Why can't we get an investment academic to design this course rather than do it like this?
Or better still get people who work in investment day to day to write the course so that those studying get what the examiners claim they are looking for "real world knowledge". I found the course dissappointing too. [rant] The chapter on asset pricing models seems to be a waste of time. It doesn't go into any detail about anything meaning it has as much use to someone is the real world as "there exist asset pricing models". The stuff on valuations appears to never be examined. The questions on exams are often poorly worded and with dubious mark allocations. Why is it that expenses is sometimes 1 point but othertimes 5 or 6 points! Why should you get marks for stating the obvious as suggested at times. The level of bookwork is huge. After sitting through GCSE's, A-levels, a degree and in my case 15 actuarial exams is there not enough proof that bookwork can be learnt! The problem is alot of the course is so vague they can't ask anything other than bookwork questions half the time. Those that claim to be application are actually bookwork dressed up in a way to make it trickier to realise what they're asking for or what on earth you're missing when there are 12 marks and only really 2 issues to consider! [/rant]
I'm just happy that it's better than CA1! For someone without much experience of finance (like myself), ST5 is ok, I guess. Like most actuarial subjects, I think the notes could do with more examples, perhaps even case-studies and real-world examples. One thing I really hate about the later exams is being asked about the advantages and disadvantages of things that I have never used. It seems so artificial. In the notes, these are just presented as lists that you need to rote-learn. Wouldn't it be better to give us some examples, so we can develop an understanding of how things are done in practice rather than rote-learning lists. Mark007, I know what you mean about vagueness, and phoney application. Once again though, ST5 is hell of a lot better than CA1 is this area.
