The most common advice for actuarial exams is to do as many practice problems as possible. And you might succeed with that strategy.
But if you’re familiar with our site, we’re not just interested in what works. We’re interested in what is optimal – how to get the same result in less time.
The issue with too many practice problems is the same as focusing on high study hour goals: quantity over quality.
Here are two methods to fix that. These strategies will help you approach practice problems with a “quality” mindset.
1. What-If Analysis
After solving a problem, ask yourself how your approach would change if you were given different assumptions.
Here are examples
- Exam P: You draw balls from an urn, without replacement. How does your calculation change if you replace the balls in between each draw?
- Exam FM: You calculate an accumulated value based on a 6% annual effective interest rate. What if the 6% was continuously compounded? What if the interest rate changed to 7% after 5 years?
- Exam MLC: You calculate the value of whole life insurance. What if the death benefit varied as a function of time instead of being constant? What if you used the Woolhouse approximation instead of assuming
uniform distribution of deaths?
With one problem, you can review a wide variety of concepts. Not only that, but you understand the relationships between them (e.g. the effects of using one approximation method over another, intuitive understanding of how the change in an assumption changes your result).
This ties back to the “knowledge tree” concept in Actuarial Exam Tactics. The What-If Analysis gets you to understand the key assumptions in the problem and their impact.
2. Revisit difficult problems
There’s nothing wrong with missing practice problems. In fact, you should seek these opportunities to point out holes in your understanding. However, many students don’t take the time to fill these holes.
Even if you review the model solution to learn from your mistakes, it’s easy to move on and forget it the next day. You should retest yourself to make sure the knowledge sticks.
Create a system to flag problems that you get wrong. Then, revisit them a week later to see if you can solve them. (Let enough time pass so you don’t rely on memorizing the model solution.)
It’s easy to overlook this approach, to want to power through new problems and progress through the manual. However, you should review difficult problems to avoid making the same mistakes over and over.
Make sure you’re learning, not just cranking through the material.
Study Smart, Pass Fast, Live Life
Mike & Roy