UNSW Course Outline

ACTL5101 Probability and

Statistics for Actuaries - 2024
Published on the 28 Jan 2024

General Course Information

Course Code : ACTL5101
Year : 2024
Term : Term 1
Teaching Period : T1
Is a multi-term course? : No
Faculty : UNSW Business School
Academic Unit : School of Risk and Actuarial Studies
Delivery Mode : In Person
Delivery Format : Standard
Delivery Location : Kensington
Campus : Sydney
Study Level : Postgraduate
Units of Credit : 6

Useful Links
Handbook Class Timetable

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Course Details & Outcomes
Course Description
This course covers probability and statistics topics relevant to actuarial studies. Topics covered
include univariate/multivariate random variables, moments, probability generating functions,
moment generating functions, marginal and conditional distributions, sampling distributions,
estimation methods, hypothesis tests, regression, analysis of variance. Examples relevant to
actuarial studies, finance and insurance are used to illustrate the application of the topics
covered.

Course Aims
At the end of the course students should be able to:

A. Demonstrate an understanding of probability theory

B. Demonstrate an understanding of statistical theory

C. Express his/her views on, and understanding of parameter estimation for parametric
distributions

D. Express his/her views on, and understanding of hypothesis testing

E. Express his/her views on, and understanding of linear regression

Relationship to Other Courses

At the end of the course you should be able to:

Demonstrate an understanding of probability and statistical theory; express your views on, and
understanding of parameter estimation for parametric distributions; express your views on, and
understanding of hypothesis testing.

This course covers probability and statistics at an introductory yet mathematically rigorous level
with a strong foundation in mathematics. The assumed knowledge of the course is a good
understanding of mathematics as covered in a full year of university calculus and linear algebra.

ACTL5101 Probability and Statistics for Actuaries will have applications in other courses in the
actuarial major. More advanced models are covered in ACTL5103 Foundations of Actuarial
Models. The course is necessary knowledge for the more advanced coverage in ACTL5105 Life

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Contingencies and ACTL5106 General Insurance Techniques.

The course corresponds to part of the actuarial professional subject CS1 Actuarial Statistics.
Students achieving Credit or higher grades will be recommended for exemption from the
professional examination. Exemptions from professional actuarial examinations require above
average performance in the equivalent University course.

Students should have a solid background in mathematics and are assumed to be able to use a
computer to analyse financial problems. You should be able to use a word processing package
(such as WORD) and a spreadsheet (such as EXCEL) as well as the statistical software R.

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Course Learning Outcomes
Course Learning Outcomes Program learning outcomes
CLO1 : Become familiar with concepts of • PLO1 : Business Knowledge
probability and statistical theory • PLO2 : Problem Solving
CLO2 : Use probability knowledge and • PLO1 : Business Knowledge
statistical skills to present data and relate to • PLO3 : Business Communication
problems in actuarial studies • PLO5 : Responsible Business Practice
• PLO7 : Leadership Development
CLO3 : Use the standard models of probability • PLO1 : Business Knowledge
and statistics to interpret and analyse real • PLO3 : Business Communication
problems in actuarial and risk modelling • PLO7 : Leadership Development
CLO4 : Construct written work that is logically • PLO1 : Business Knowledge
and professionally presented • PLO3 : Business Communication
• PLO7 : Leadership Development
CLO5 : Communicate ideas in a succinct and • PLO3 : Business Communication
clear manner • PLO7 : Leadership Development
CLO6 : Work collaboratively to complete a task • PLO3 : Business Communication
• PLO4 : Teamwork

Course Learning Outcomes Assessment Item

CLO1 : Become familiar with concepts of • Final Examination
probability and statistical theory • Quiz
• Assignment
CLO2 : Use probability knowledge and statistical • Final Examination
skills to present data and relate to problems in • Quiz
actuarial studies • Assignment
CLO3 : Use the standard models of probability • Participation Mark
and statistics to interpret and analyse real • Final Examination
problems in actuarial and risk modelling • Quiz
• Assignment
CLO4 : Construct written work that is logically and • Participation Mark
professionally presented • Final Examination
CLO5 : Communicate ideas in a succinct and • Participation Mark
clear manner • Final Examination
CLO6 : Work collaboratively to complete a task • Participation Mark
• Final Examination

Learning and Teaching Technologies

Moodle - Learning Management System | Echo 360

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Learning and Teaching in this course
The course is delivered in-person, with lectures crafted to enhance students' comprehension of
the material. Additionally, tutorials provide an opportunity for students to apply and practice their
acquired knowledge. Both lectures and tutorials are conducted in a face-to-face setting.

Course materials are organised in 2 modules (Module 1: Probability; Module 2: Statistics).

Students are responsible for learning topics with the following materials:

Lecture slides
Tutorial quesions
Past exams
Prescribed textbooks

The lectures, tutorials and assessment have been designed to appropriately challenge students
and support the achievement of the desired learning outcomes. A climate of inquiry and dialogue
is encouraged between students and teachers and among students (in and out of class). The
lecturers and tutors aim to provide meaningful and timely feedback to students to improve
learning outcome. This is not a course where you can become proficient just by observing.

You will need to get involved in class - evaluating information, asking and answering questions.
You also must learn to organize your independent study and practice enough problems to gain a
thorough understanding of concepts and how to apply them.

This course material each week requires that you know the material of previous weeks.
Therefore, falling behind will lead to less effective lectures and tutorials and is thus not
recommended.

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Assessments
Assessment Structure
Assessment Item Weight Relevant Dates
Final Examination 60%
Assessment Format: Individual
Quiz 15%
Assessment Format: Individual
Participation Mark 5%
Assessment Format: Individual
Assignment 20%
Assessment Format: Individual

Assessment Details
Final Examination
Assessment Overview

This is a 2-hour closed book exam that will be invigilated and scheduled during the university
exam period.

Course Learning Outcomes

CLO1 : Become familiar with concepts of probability and statistical theory

CLO2 : Use probability knowledge and statistical skills to present data and relate to problems
in actuarial studies
CLO3 : Use the standard models of probability and statistics to interpret and analyse real
problems in actuarial and risk modelling
CLO4 : Construct written work that is logically and professionally presented
CLO5 : Communicate ideas in a succinct and clear manner
CLO6 : Work collaboratively to complete a task

Quiz
Assessment Overview

Short formative assessments occurring on a fortnightly basis to keep students engaged and
provide ongoing feedback on their learning progress.

Course Learning Outcomes

CLO1 : Become familiar with concepts of probability and statistical theory

CLO2 : Use probability knowledge and statistical skills to present data and relate to problems
in actuarial studies
CLO3 : Use the standard models of probability and statistics to interpret and analyse real
problems in actuarial and risk modelling

Participation Mark
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Assessment Overview

To encourage active engagement in the course, a participation mark rewards regular contribution
and interaction within the tutorial.

PLO2: Problem solving

PLO3: Business communication

Course Learning Outcomes

CLO3 : Use the standard models of probability and statistics to interpret and analyse real
problems in actuarial and risk modelling
CLO4 : Construct written work that is logically and professionally presented
CLO5 : Communicate ideas in a succinct and clear manner
CLO6 : Work collaboratively to complete a task

Assignment
Assessment Overview

The assignment component is split into two parts: a theoretical assignment in week 5, mirroring
the format of the final exam to account for 10%, and a practical assignment using R
programming to be completed during weeks 9-10, also worth 10%.

Course Learning Outcomes

CLO1 : Become familiar with concepts of probability and statistical theory

CLO2 : Use probability knowledge and statistical skills to present data and relate to problems
in actuarial studies
CLO3 : Use the standard models of probability and statistics to interpret and analyse real
problems in actuarial and risk modelling

General Assessment Information

All details and schedule of assessments will be provided on the course Moodle site.

Grading Basis

Standard

Requirements to pass course

Achieve a composite mark of 50 out of 100.

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Course Schedule

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Teaching Week/Module Activity Type Content
Week 1 : 12 February - 18 February Lecture 1.1 Introduction to probability
Sample space, probability measure
Conditional probability and independence
Random variables and distributions
Measures of location
Measure of dispersion
Moments (central/non-central)
Generating functions
Week 2 : 19 February - 25 February Lecture 1.2 Univariate Ditributions
Bernoulli Distribution
Binomial Distribution
Geometric Distribution
Negative Binomial Distribution
Poisson Distribution
Exponential Distribution
Gamma Distribution
Week 3 : 26 February - 3 March Lecture 1.2 Univariate Ditributions
Normal Distribution
Log-Normal Distribution
Uniform Distribution
Beta Distribution
1.3 Joint and Multivariate Distributions
Bivariate distribution functions
Mean, variance, covariance & correlation
Week 4 : 4 March - 10 March Lecture 1.3 Joint and Multivariate Distributions
Conditional Distributions
Bivariate Normal Distribution
Multivarate distribution functions
1.4 Functions of Random Variables
The CDF techniques
The Jacobian transformation technique
The MGF technique
Order statistics, min, max
Convolution

Week 5 : 11 March - 17 March Lecture 1.4 Functions of Random Variables

Special sampling distributions (Student-t, F, Chi2 distributions)
1.5 Sequences and Convergence of Random Variables
Chebyshev's inequality
Convergence concepts
Law of Large Numbers
Central Limit Theorem
Applications of convergence to distributional approximations
Week 6 : 18 March - 24 March Lecture Flexibility week
Week 7 : 25 March - 31 March Lecture 2.1 Data Exploration: Visualisation and Descriptive Statistics
Numerical methods
Graphical methods
Properties of sample mean and sample variance
2.2 Point and interval estimation techniques
Introducition/Definitions
Method of Moments
Maxium Likelihood Estimation (MLE)
Week 8 : 1 April - 7 April Lecture 2.2 Point and interval estimation techniques
Confidence Intervals
2.3 Evaluating point estimators
UMVUE
Cramer-Rao Low Bound
Consistency
Properties of MLEs
Week 9 : 8 April - 14 April Lecture 2.4 Hypothesis testing
Introduction to hypothesis testing
Rejection region
Type I & II error
Power of the test
p-value
Relation between confidence intervals and hypothesis tests
2.5 Parametric and nonparametric hypothesis tests
Two-sample test of means
Two-sample test of variances
Wald test
Week 10 : 15 April - 21 April Lecture 2.5 Parametric and nonparametric hypothesis tests
Generalized Likelihood Ratio test
Contingency table and Chi-2 tests

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Attendance Requirements
Students are strongly encouraged to attend all classes and review lecture recordings.

General Schedule Information

The provided schedule is an estimate. Completion times for specific topics may vary, as we may
progress through some topics more quickly or slowly than anticipated.

Tutorials will be structured around the content discussed in that week's lecture.

Complete information and the schedule for assessments will be made available on the Moodle
website.

Course Resources
Prescribed Resources
Textbooks
The prescribed textbooks for the course are:

[FT] The Faculty of Actuaries and The Institute of Actuaries (2002), Formulae and tables for
examinations of the Faculty of Actuaries and The Institute of Actuaries. (The formulae book
you can use, if unannotated, in quizzes and exams for actuarial courses.)

Suggested textbooks for the course are:

[W+] Wackerly, D.D., Mendenhall, W. & Schaeffer, R.L (2008), Mathematical Statistics with
Applications, Duxbury, 7th ed. Well respected introductory textbook. Not as difficult as [JR].
[JR] Rice, J.A. (2007), Mathematical Statistics and Data Analysis, Duxbury Press, 3rd ed. Well
regarded and comprehensive textbook. More technical than [W+].

You are advised to have one (or both) of these textbooks in this course. Depending on your
mathematical background, you should choose either [W+] or [JR].

Optional readings are

[CT] The Actuarial Education Company (2010), CT3 Combined Materials Pack, ActEd. (This is
the Institute of Actuaries study material for the CT3 exam. Only the syllabus can be
downloaded for free.)
[H] Hossack, I., Pollard, J. & Zehnwirth, B. (1999), Introductory Statistics with Applications in
General Insurance, Cambridge University Press, 2ed. (Want to see how statistic is used in the
most statistical actuarial practice area, general insurance? Heres your starting place.)
Formulae & Tables
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Students will only be allowed to bring into the examinations for the Actuarial courses in the
BCom the text "Formulae and Tables for Actuarial Examinations". This text must not be
annotated. All students in the actuarial courses should purchase a copy of this text if they wish
to use this in the final examinations for this course. The text is available from the UNSW
bookstore, the UK Institute of Actuaries or from ActEd Australia.

Course Evaluation and Development

Feedback is regularly sought from students and continual improvements are made based on this
feedback. At the end of this course, you will be asked to complete the myExperience survey,
which provides a key source of student evaluative feedback. Your input into this quality
enhancement process is extremely valuable in assisting us to meet the needs of our students
and provide an effective and enriching learning experience. The results of all surveys are
carefully considered and do lead to action towards enhancing educational quality.

Staff Details
Position Name Email Location Phone Availability Equitable Learning Primary
Services Contact Contact
Convenor Katja Ignatiev Business provided on No Yes
a School Moodle
Robert Annab Business provided on No No
el School Moodle

Other Useful Information

Academic Information
COURSE POLICIES AND SUPPORT

The Business School expects that you are familiar with the contents of this course outline and
the UNSW and Business School learning expectations, rules, policies and support services as
listed below:

Program Learning Outcomes

Academic Integrity and Plagiarism
Student Responsibilities and Conduct
Special Consideration
Protocol for Viewing Final Exam Scripts
Student Learning Support Services

Further information is provided on the key policies and support page.

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Students may not circulate or post online any course materials such as handouts, exams, syllabi
or similar resources from their courses without the written permission of their instructor.

STUDENT LEARNING OUTCOMES

The Course Learning Outcomes (CLOs) – under the Outcomes tab – are what you should be
able to demonstrate by the end of this course, if you participate fully in learning activities and
successfully complete the assessment items.

CLOs also contribute to your achievement of the Program Learning Outcomes (PLOs), which are
developed across the duration of a program. PLOs are, in turn, directly linked to UNSW graduate
capabilities. More information on Coursework PLOs is available on the key policies and
support page. For PG Research PLOs, including MPDBS, please refer to the UNSW HDR Learning
Outcomes.

Academic Honesty and Plagarism

As a student at UNSW you are expected to display academic integrity in your work and
interactions. Where a student breaches the UNSW Student Code with respect to academic
integrity, the University may take disciplinary action under the Student Misconduct Procedure. To
assure academic integrity, you may be required to demonstrate reasoning, research and the
process of constructing work submitted for assessment.

To assist you in understanding what academic integrity means, and how to ensure that you do
comply with the UNSW Student Code, it is strongly recommended that you complete the Working
with Academic Integrity module before submitting your first assessment task. It is a free, online
self-paced Moodle module that should take about one hour to complete.

Submission of Assessment Tasks

SPECIAL CONSIDERATION

You can apply for special consideration when illness or other circumstances beyond your control
interfere with your performance in a specific assessment task or tasks, including online exams.
Students studying remotely who have exams scheduled between 10pm and 7am local time, are
also able to apply for special consideration to sit a supplementary exam at a time outside of
these hours.

Special consideration is primarily intended to provide you with an extra opportunity to

demonstrate the level of performance of which you are capable. To apply, and for further

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information, see Special Consideration on the UNSW Current Students page.

Special consideration applications will be assessed centrally by the Case Review Team, who will
update the online application with the outcome and add any relevant comments. The change to
the status of the application immediately sends an email to the student and to the assessor with
the outcome of the application.

Please note the following:

1. Applications can only be made through Online Services in myUNSW (see the UNSW Current
Students page). Applications will not be accepted by teaching staff. The lecturer-in-charge/
course coordinator will be automatically notified when your application is processed.
2. Applying for special consideration does not automatically mean that you will be granted a
supplementary exam or other concession.
3. If you experience illness or misadventure in the lead up to an exam or assessment, you must
submit an application for special consideration, either prior to the examination taking place, or
prior to the assessment submission deadline, except where illness or misadventure prevent
you from doing so.
4. If your circumstances stop you from applying before your exam or assessment due date, you
must apply within 3 working days of the assessment or the period covered by your supporting
documentation.
5. Under the UNSW Fit To Sit/Submit rule, if you sit the exam/submit an assignment, you are
declaring yourself well enough to do so and are cannot subsequently apply for special
consideration.
6. If you become unwell on the day of – or during – an exam, you must stop working on your
exam, advise your course coordinator or tutor and provide a medical certificate dated within
24 hours of the exam, with your special consideration application. For online exams, you must
contact your course coordinator or tutor immediately via email, Moodle or chat and advise
them you are unwell and submit screenshots of your conversation along with your medical
certificate and application.
7. Special consideration requests do not allow the awarding of additional marks to students.

Further information on Business School policy and procedure can be found under “Special
Consideration” on the key policies and support page.

LATE SUBMISSION PENALTIES

For assessments other than examinations, late submission will incur a penalty of 5% per day or
part thereof (including weekends) from the due date and time. An assessment will not be
accepted after 5 days (120 hours) of the original deadline unless special consideration has been
approved. An assignment is considered late if the requested format, such as hard copy or

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electronic copy, has not been submitted on time or where the ‘wrong’ assignment has been
submitted.

For assessments which account for 10% or less of the overall course grade, and where answers
are immediately discussed or debriefed, the LIC may stipulate a different penalty. Details of such
late penalties will be available on the course Moodle page.

FEEDBACK ON YOUR ASSESSMENT TASK PERFORMANCE

Feedback on student performance from formative and summative assessment tasks will be
provided to students in a timely manner. Assessment tasks completed within the teaching period
of a course, other than a final assessment, will be assessed and students provided with
feedback, with or without a provisional result, within 10 working days of submission, under
normal circumstances. Feedback on continuous assessment tasks (e.g. laboratory and studio-
based, workplace-based, weekly quizzes) will be provided prior to the midpoint of the course.

Faculty-specific Information
PROTOCOL FOR VIEWING FINAL EXAM SCRIPTS

UNSW students have the right to view their final exam scripts, subject to a small number of very
specific exemptions. The UNSW Business School has set a protocol under which students may
view their final exam script. Individual schools within the Faculty may also set up additional local
processes for viewing final exam scripts, so it is important that you check with your School.

If you are completing courses from the following schools, please note the additional school-
specific information:

Students in the School of Accounting, Auditing & Taxation who wish to view their final
examination script should also refer to this page.
Students in the School of Banking & Finance should also refer to this page.
Students in the School of Information Systems & Technology Management should also refer
to this page.

COURSE EVALUATION AND DEVELOPMENT

Feedback is regularly sought from students and continual improvements are made based on this
feedback. At the end of this course, you will be asked to complete the myExperience survey,
which provides a key source of student evaluative feedback. Your input into this quality
enhancement process is extremely valuable in assisting us to meet the needs of our students

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and provide an effective and enriching learning experience. The results of all surveys are
carefully considered and do lead to action towards enhancing educational quality.

QUALITY ASSURANCE

The Business School is actively monitoring student learning and quality of the student
experience in all its programs. A random selection of completed assessment tasks may be used
for quality assurance, such as to determine the extent to which program learning goals are being
achieved. The information is required for accreditation purposes, and aggregated findings will be
used to inform changes aimed at improving the quality of Business School programs. All
material used for such processes will be treated as confidential.

TEACHING TIMES AND LOCATIONS

Please note that teaching times and locations are subject to change. Students are strongly
advised to refer to the Class Timetable website for the most up-to-date teaching times and
locations.

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