Question regarding which book to use to study for an actuarial exam.

Question

I am considering a career change and I would like to have some advice regarding the exam 1 (probability) that I need to pass as an actuary.

The books that are recommended by SOA is the following.

1), A First Course in Probability (8th Ed) by Ross S.M.

2), Mathematical Statistics with Applications (7th Ed) by Wackerly D.

3), Probability for Risk Management (2nd Ed) by Hassett, M.

4), Probability and Statistical Inference (8th Ed) by Hogg R.V.

5), Probability and Statistics with Applications: A Problem Solving Text, by Asimow L.

6), Probability: The Science of Uncertainty with Applications to ... by Bean M.A.

I am not a student anymore and I would love to know which one (or a combination) of these would be helpful to self study.

Can anyone help me out ?

Thanks for your help.

Answer 1

Honestly, I know it's not the greatest ever, but for a great introduction to the subject with a focus on insurance is a free e-book from Marcel Finan. It's not heavy theoretic stuff but it goes over everything and has a ton of problems. The caveat is that while he provides answers they are not solutions, so if you are confused you have to buckle down an figure it out. The Broverman actex manual is great because there are exam quality problems and 7-8 practice exams. Of course it is pricey. I passed P/1 on my first try with a combination of both of these text with my basic intro from Hogg's "Probability and Statistical Inference". For Marcel Finan's book, go to his website at http://faculty.atu.edu/mfinan/npub.html

Answer 2

The actuarial probability exam is straight up probability. Any of these books will work, and reading more than one will be beneficial. Even better, take practice exams if they are available. You will get a feel for the questions asked, and then you can relate these back to the book(s) you are using to focus on what is important for the exam. But if you have a strong background in probability, you should have no difficulty.

Answer 3

First, if you don't know a lot about probability and statistics you want to start with some basic material. The first two books on the list are probably intended to be basic. However, I find some of those "basic" books to be very hard to self study from if I don't know much about the subject. So if that's the case, then you should get something like "probability for dummies", or the Schaum's outline on probability and/or statistics. Then go thru the basic books with your "dummies" books on hand, and keep cross referencing them.

The other books seem more advanced. Certainly statistical inference is going to be basic to actuarial work, as is risk management (a fun topic).

You should probably ask SOA how much is covered on the first exam so you can make up a sensible study plan. I believe there are about 10 exams to get to the highest level. Possibly the more advanced topics are covered in later exams, which would limit what you must study to get started.

Might I also suggest you look for open online courses. I'm sure there are some in probability and statistics. Sometimes a lecture can be very illuminating even if you can't ask questions. And you might in fact be able to ask questions.