2014 Edition
November 2014
Institute and Faculty of Actuaries
Page 1
Disclaimer: This Module 0 Resource Guide has been prepared by and/or on behalf of the Institute
and Faculty of Actuaries (IFoA). The IFoA does not accept any responsibility and/or liability
whatsoever for the content or use of this resource guide. This resource guide does not constitute
advice and should not be relied upon as such. The IFoA does not guarantee any outcome or result
from the application of this resource guide and no warranty as to the accuracy or correctness of this
resource guide is provided.
Copyright: All material in this resource guide is the copyright material of the IFoA, unless otherwise
stated. Use may be made of these pages for noncommercial and study/research purposes without
permission from the IFoA. Commercial use of this material may only be made with the express, prior
written permission of the IFoA. Material provided by any third party and incorporated into this resource
guide, is likely to be the copyright material of that author. Permission to copy or otherwise use such
material must be obtained from the author.
Institute and Faculty of Actuaries (RC 000243)
2014 Edition V6
Module 0
Entry Exam
Fundamental Mathematics and Statistics
Certified Actuarial Analyst
Resource Guide
Version 6 updated 5 November 2014
2014 Edition V6
Welcome to the Resource Guide for Module 0 Fundamental Mathematics and Statistics
the entry exam module for the Institute and Faculty of Actuaries Certified Actuarial
Analyst qualification launched in 2014. The purpose of this Resource Guide is to provide you
with a one stop virtual guide to all there is to know about this module: registration, contact
us details; the syllabus, assessment, learning resources, and questions and answers.
1.0
2.0
Module Reference
Assessment
Fundamental
Mathematics & Statistics
CAA (0)
CAA (1)
CAA (2)
CAA (3)
CAA (4)
CAA (5)
3 hour examination
Online Professional
Awareness Test (OPAT)
OPAT
90 minute examination
*An additional 15 minutes will be allowed before the start of the exam for
administrative purposes which include agreeing to a statement of confidentiality,
reading instructions and working through basic sample questions which will enable
you to become familiar with the format of the exam.
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2014 Edition V6
In addition to passing the above exams, students must complete at least one year of
relevant work experience (Work Based Skills), comply with the IFoAs ethical code
and adhere to the IFoAs Continuing Professional Development (CPD) requirements.
3.0
The Syllabus
The Module 0 syllabus can found in Appendix One attached to this Resource Guide.
4.0
Module 0  4
Module 5
5.0
5.1
50 hours
At the present time, there is no face to face tuition of which the IFoA is aware. Please
see Section 5.2 for online tuition provision.
5.2
Online Learning
There is one learning provider based in the UK that will be offering online learning
resources for the CAA qualification.
BPP Actuarial Education
www.bppacted.com
Email: ActEd@bpp.com
Tel: +44 (0)1235 550005
5.3
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2014 Edition V6
5.4
Core Maths for Advanced Level, L. Bostock and F.S.Chandler, 3rd Edition, 2013
5.4.1
Samples of links covering the prerequisite content for this module are:
Number
http://www.bbc.co.uk/bitesize/ks3/maths/number/
Measure
http://www.bbc.co.uk/bitesize/ks3/maths/measures/
5.4.2
5.4.3
TOPIC 3 Algebra
http://www.bbc.co.uk/bitesize/ks3/maths/algebra/
http://www.sosmath.com/calculus/calculus.html
[Note: Use this link and cross reference to the following topics in the Module 0
syllabus to find further learning support for : Differentiation; Integration; and
Techniques of Integration]
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5.4.4
2014 Edition V6
5.4.5
6.0
Pass standards Pass standards are set by the IFoA Examinations Board.
Details of pass standards for CAA Exams will be published as soon as
possible.
All exams will be administered through Pearson VUE test centres located in
regions across the globe. Please visit our Pearson VUE website and click on
Locate a test centre to find your nearest Pearson VUE testing centre.
7.0
7.1
Approved Calculator
The IFoA approved calculator for the Certified Actuarial Analyst exams is the Texas
Instruments TI30 Multiview (with or without suffix). An example of this model is
shown below:
This will be the only physical calculator allowed into the exam. Please expect your
calculator to be checked by the proctors at the exam centre. This process will include
deleting any information stored on the memory of your calculator.
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2014 Edition V6
Please note: Pearson VUE staff will not be issuing physical calculators should you
fail to bring your own IFoA approved calculator to the examination. In the instance
that you fail to bring your own IFoA approved calculator, an onscreen scientific
calculator will be available during the exam [see 7.2 below for details].
The approved Certified Actuarial Analyst calculator is available to purchase from our
eShop.
7.2
Onscreen Calculator
An onscreen scientific calculator will be accessible from all examination screens
during the entirety of the examination. Please find an example below of an onscreen
scientific calculator.
7.3
It is strongly recommended that you make yourself familiar with the Formulae and
Tables before sitting the CAA exams. The Formulae and Tables book is available to
purchase from our eShop.
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7.4
2014 Edition V6
Making notes
Scrap paper, for use in the examinations, will be provided by Pearson VUE staff. This
will consist of a notebook that contains multiple erasable note boards or individual
erasable note boards, as well as an erasable fine tip marker pen. You will have
access to as many note boards as required and will be able to use the note boards,
as well as the marker pen, for the duration of the exam.
Please note, for security reasons, Pearson VUE do not provide erasers for the note
board and pens.
Both the note board and pen will be collected by Pearson VUE staff upon completion
of the exam.
8.0
Sample Questions
A Module 0 Specimen Examination Paper with sample examination questions is
provided in Appendix Two attached to this Resource Guide. Only 20 sample
questions are listed in the Module 0 Specimen Examination Paper, although there will
be a total of 65 questions in the actual Module 0 examination. The questions found in
the specimen paper will not be included in the actual Module 0 examination.
9.0
To give you an idea of what you can expect when sitting your exam at a
Pearson VUE test centre, watch the short video on our website.
Before beginning your exam, 15 minutes will be allocated at the start in which
you will be required to agree to a NonDisclosure and General Terms of Use
Agreement. You will also have the option to participate in an exam tutorial in
this time.
Please note that you must agree to the NonDisclosure and General Terms of
Use Agreement in order to sit your exam. Failure to do so will result in your not
being permitted to sit your exam.
Please make yourself familiar with the IFoA and Pearson VUE testing policies.
These can be found in the Guide to Module 0 and the Student Handbook as
well as by logging in to your Pearson VUE online account.
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2014 Edition V6
APPENDIX ONE
Module 0
Entry Exam
Certified Actuarial Analyst
Syllabus
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2014 Edition V6
Aim
The aim of the Entry Exam syllabus is to ensure that applicants for the Analyst qualification
have a grounding in the mathematics and basic statistics that underpin actuarial work.
Module 0 must be passed before a candidate can proceed to later modules.
The following is assumed of applicants studying the syllabus for Module 0.

a, b, c, n , n 3: a n bn c n
x (,0], x 2 {0}
{x : x 1, 2,3, }
Zero is a nonnegative integer; is a positive real number.
f ( x ) vanishes as x tends to , is not defined when x 0 , but takes
positive values for sufficiently large x .
Know the representations and names of the letters of the Greek alphabet that are
commonly used in mathematical, statistical and actuarial work, including in particular,
the following letters:
lowercase:
uppercase:
e x ) and natural log ( ln x ) functions. (The following features are also useful but not
essential: factorial function ( n! ), combinations ( n Cr ), hyperbolic tangent function

And its inverse ( tanh x and tanh 1 x ), fraction mode, at least one memory and an
undo facility. Statistical and financial functions are not required.) Students should
be able to make efficient use of memories, brackets and/or the calculator stack.
Estimate the numerical value of expressions without using a calculator and apply
reasonableness tests to check the result of a calculation.
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Objectives
TOPIC 1
Numerical methods
Indicative study and assessment weighting 10%
Learning Objectives
(i)
(ii)
Calculate the absolute error, the proportionate error or the percentage error in
comparisons involving actual versus expected values or approximate
versus accurate values (using the correct denominator and sign, where
appropriate)
(iii)
(iv)
Apply simple iterative methods, based on trial and improvement, to solve nonlinear
equations
(v)
(vi)
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TOPIC 2
Mathematical constants & standard functions
Indicative study and assessment weighting 5%
Learning Objectives
(i)
Apply the definitions and basic properties of the functions x n (where n may be
negative or fractional), c x (where c is a positive constant), exp( x ) [ e x ], and ln x [
log e x or log x ]
(ii)
Sketch graphs of simple functions involving the basic functions in 2 (i) above, by
identifying key points, identifying and classifying turning points, considering the sign
and gradient, and the behaviour near 0, 1, or other critical values
(iii)
(iv)
(v)
Explain the concept of a bounded function. [The notation ( x 100) will also be used
as an abbreviation for max( x 100,0 ) ]
TOPIC 3
Algebra
Indicative study and assessment weighting 25%
Learning Objectives
(i)
(ii)
(iii)
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(v)
(vi)
Apply the and notation for sums and products, including sums over sets (eg
) and repeated sums
i0
(vii)
AP n2 (2a (n 1)d ) or
n (a l ) ,
2
a (1 r n )
and
GP
1 r
a
,
GP
1 r
(viii)
(ix)
k 12 n( n 1) and
k 1
k 2 16 n( n 1)(2n 1)
k 1
(x)
(xi)
positive integer, and (1 x ) for any real value of p and, in the latter case,
determine when the series converges
p
TOPIC 4
Calculus
Indicative study and assessment weighting 25%
Learning Objectives
(i)
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(iii)
(iv)
(v)
(vi)
(vii)
Apply the concept of an indefinite integral as the antiderivative of a function and the
meaning of a definite integral as the limit of a sum of infinitesimal elements, including
the interpretation of a definite integral as the area under a graph
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
State and apply Taylor series and Maclaurin series in their simplest form,
including using these to determine the approximate change in a function
when the argument is varied by a small amount. (Knowledge of the error
terms is not required)
(xvi)
Apply the Taylor series expansions for e x and ln(1 x ) and, in the latter case,
determine when the series converges
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TOPIC 5
Probability and statistics
Indicate study and assessment weighting 35%
Learning Objectives
(i)
(ii)
Describe the level/location of a set of data using the mean, median, mode, as
appropriate
(iii)
Describe the spread/variability of a set of data using the standard deviation, range,
interquartile range, as appropriate
(iv)
Explain what is meant by symmetry and skewness for the distribution of a set of data
(v)
(b)
(c)
(d)
Define the addition rule for the probability of the union of two events,
and use the rule to calculate probabilities
(e)
(f)
Define Bayes Theorem for events, and use the result to calculate
probabilities
(g)
(vi)
(vii)
Explain what is meant by a discrete random variable, define the distribution function
and the probability function of such a variable, and use these functions to calculate
probabilities
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(viii)
(ix)
Define the expected value of a function of a random variable, the mean, the variance,
the standard deviation, the coefficient of skewness and the moments of a random
variable, and calculate such quantities
END OF SYLLABUS
Disclaimer: This syllabus has been prepared by and/or on behalf of the Institute and Faculty of
Actuaries (IFoA). The IFoA does not accept any responsibility and/or liability whatsoever for the
content or use of this syllabus. This syllabus does not constitute advice and should not be relied upon
as such. The IFoA does not guarantee any outcome or result from the application of this syllabus and
no warranty as to the accuracy or correctness of this syllabus is provided.
Copyright: All material in this syllabus is the copyright material of the IFoA, unless otherwise stated.
Use may be made of these pages for noncommercial and study/research purposes without
permission from the IFoA. Commercial use of this material may only be made with the express, prior
written permission of the IFoA. Material provided by any third party and incorporated into this syllabus,
is likely to be the copyright material of that author. Permission to copy or otherwise use such material
must be obtained from the author.
Institute and Faculty of Actuaries (RC 000243)
Page 17
2014 Edition V6
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2014 Edition V6
APPENDIX TWO
Module 0
Entry Test
Certified Actuarial Analyst
Specimen Examination Paper
This module must be passed (or an exemption granted)
before a candidate can register with the IFoA as a
student Actuarial Analyst.
Please Note: This Specimen Examination Paper acts as an example of
the types of questions that will appear in the Module 0 Exam Paper.
Although only 20 sample questions are listed in this specimen paper,
there will be a total of 65 questions in the actual Module 0 examination.
The questions found in the Module 0 Specimen Examination Paper will
not be included in the actual Module 0 examination.
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2014 Edition V6
On 31 December 2012 an investment fund was valued at 31,425. The value of the fund on 31
December 2011 was 39,040. By what percentage had the fund changed during 2012?
A
+ 19.5%
 19.5%
+ 24.2%
 24.2%
Answer: B
[Topic 1]
2
For a particular model of motorcycle the stopping distance at 50 miles per hour is
measured at 144 feet and the stopping distance at 70 miles per hour is 296 feet.
Using linear interpolation, the stopping distance at 62 miles per hour, in feet, rounded
to the nearest foot would be:
193 feet
205 feet
233 feet
235 feet
Answer: 235
[Topic 1]
3
If a =
1 0 and b = 5 3 2 then 2a 4b =
16
14 8
16
14
8
16
16
14
8
14 8
T
Answer: D
[Topic 1]
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2014 Edition V6
Answer: A
[Topic 2]
5
For the function f(x), if there exists a real number M such that
is said to be:
A
real
unbounded
bounded
continuous
Answer: C
[Topic 2]
6
Which of the following expressions about the exponential function exp(x) is/are TRUE?
I
x
exp( x) lim 1
n
n
xn
n 1 n !
II
exp( x)
III
1
exp( x) lim 1
n
n
I and II only
I only
III only
Answer: C
[Topic 2]
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10 (1.095) j
j0
11
10(1.095) j
j0
11
10(1.095) j
j1
11
10 (1.095) j
j1
Answer: D
[Topic 3]
8
r 1
r 1
B
C
r 1
r 1
Answer: B
[Topic 3]
9
30 16 x 2 28 x
A
(8 x 6)(2 x 5) 0
(4 x 6)(4 x 5) 0
(3 16 x)( x 10) 0
(16 x 30)( x 1) 0
Answer: A
[Topic 3]
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2014 Edition V6
(e x 2 x)( x 2 2 x)
2 xe x 2 e x 4 x 2 4 x
2 xe x 2 e x 4 x 2 4
x 2 e x 2e x 6 x 2 8 x
x 2 e x 2 xe x 2 x 2 4 x
Answer: C
[Topic 4]
11
Answer: B
[Topic 4]
12
Find
dy
2
2
given that 3x 5 xy 2 y 6
dx
6x 5 y
5x 4 y
6x 5 y
4 y 5x
6x 5 y
4 y 5x
Answer: A
[Topic 4]
Page 23
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2014 Edition V6
The stem and leaf diagram below shows the value of 40 claim amounts from a group of health
insurance policies. The stem unit is $10,000 and the leaf unit is $1,000
0
1
2
3
4
5
6
7
8
9
3
0259
1578
279
1223556
01244889
14566778
0114
1
$60,000
$60,500
$63,000
$65,000
Answer: B
[Topic 5]
14
Suppose A and B are events with P ( A) 0.5 , P(B) 0.75 and P ( A B ) 0.80 .
Calculate the probability P ( A B )
A
0.375
0.4
0.45
0.6
Answer: C
[Topic 5]
15
0.25
0.65
0.75
0.85
Answer: D
[Topic 5]
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2014 Edition V6
0.35
0.40
0.45
0.85
Answer: A
[Topic 5]
17
The number of claims, X, on an extended warranty policy for a particular model of sandwich
toaster has the following probability distribution:
x
P(X=x)
0.08
0.16
0.22
0.35
0.17
0.02
Calculate P(X>2)
A
0.22
0.24
0.54
0.76
Answer: C
[Topic 5]
18
20
40
50
70
Answer: D
[Topic 5]
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2014 Edition V6
10
15
20
25
Answer: C
[Topic 5]
20
For a given set of data the mean is 10.5 and the mode is 9. What c an we deduce about the
skewness of the data?
A
Answer: D
[Topic 5]
Disclaimer: This specimen examination paper has been prepared by and/or on behalf of the Institute
and Faculty of Actuaries (IFoA). The IFoA does not accept any responsibility and/or liability
whatsoever for the content or use of this specimen examination paper. This specimen examination
paper does not constitute advice and should not be relied upon as such. The IFoA does not
guarantee any outcome or result from the application of this specimen examination paper and no
warranty as to the accuracy or correctness of this specimen examination paper is provided.
Copyright: All material in this specimen examination paper is the copyright material of the IFoA,
unless otherwise stated. Use may be made of these pages for noncommercial and study/research
purposes without permission from the IFoA. Commercial use of this material may only be made with
the express, prior written permission of the IFoA. Material provided by any third party and
incorporated into this specimen examination paper, is likely to be the copyright material of that author.
Permission to copy or otherwise use such material must be obtained from the author.
Institute and Faculty of Actuaries (RC 000243)
Page 26
2014 Edition V6
Page 27
DISCLAIMER The views expressed in this publication are those of invited contributors and not necessarily those
of the Institute and Faculty of Actuaries. The Institute and Faculty of Actuaries do not endorse any of the views
stated, nor any claims or representations made in this publication and accept no responsibility or liability to any
person for loss or damage suffered as a consequence of their placing reliance upon any view, claim or
representation made in this publication. The information and expressions of opinion contained in this publication
are not intended to be a comprehensive study, nor to provide actuarial advice or advice of any nature and
should not be treated as a substitute for specific advice concerning individual situations. On no account may any
part of this publication be reproduced without the written permission of the Institute and Faculty of Actuaries.
London
7th Floor Holborn Gate 326330 High Holborn London WC1V 7PP
Tel: +44 (0) 20 7632 2100 Fax: +44 (0) 20 7632 2111
Edinburgh
Maclaurin House 18 Dublin Street Edinburgh EH1 3PP
Tel: +44 (0) 131 240 1300 Fax: +44 (0) 131 240 1313
Oxford
1st Floor Park Central 40/41 Park End Street Oxford OX1 1JD
Tel: +44 (0) 1865 268 200 Fax: +44 (0) 1865 268 211
Hong Kong
2202 Tower Two Lippo Centre 89 Queensway Hong Kong
Tel: +11 (0) 852 2147 9418 Fax: +11 (0) 852 2147 2497
www.actuaries.org.uk
2014 Institute and Faculty of Actuaries