# Actuarial Science

• MET AT 602: Laboratory for Actuarial and Financial Data Analysis II
This course covers the usage of spreadsheet and database software in an insurance setting. The student will work on calculating premiums and analyzing loss metrics over the term while learning about the tools in Microsoft Excel and Access that help an actuary perform their analysis in a timely and accurate manner. Ten sessions.
• MET AT 721: Mathematics of Compound Interest
This course develops uses of interest as it relates to the theory of finance. Students will gain an understanding of interest calculations related to financial instruments such as bonds, mortgages, annuities, and financial instruments with non-level payment schemes. The material covered in this course may help students prepare for SoA/CAS Exam FM.
• MET AT 722: Finance for Actuaries
This course builds off of the topics covered in AT721 ("Mathematics of Compound Interest") by developing both basic and advanced models of corporate finance. Topics covered include net present value valuation, internal rate of return and profitability index models, capital budgeting models, and efficient market hypotheses. These tools will be used to understand and apply basic principles of option pricing theory, including the Black-Scholes formula with application to binomial lattice valuation. The material covered in this course may help students prepare for SoA/CAS Exam FM.
• MET AT 731: Actuarial Mathematics I
Undergraduate Prerequisites: MET MA 581 and MET AT 721.
This course covers the fundamental principles of actuarial science. Students will be introduced to basic actuarial concepts of survival models, such as probabilities of survival and death, then use these concepts to develop expressions for life expectancies. Life insurance and life annuities are then introduced, and the course will develop detailed methods for the valuation of each, including payments made more often than annually. The final topic for the course is the methodology of calculation of premiums for both insurance and annuity models. For all these topics, a basic framework will be presented, then more sophisticated models are developed. The material covered in this course may help students prepare for SoA Exam LTAM.
• MET AT 732: Actuarial Mathematics II
Undergraduate Prerequisites: MET AT 731 or consent of instructor.
Graduate Prerequisites: MET AT 731 or consent of instructor.
This continues with the development of financial models first introduced in AT731 ("Actuarial Mathematics I"). Insurance Reserves are introduced, including methods for determining reserves, the impact of actuarial assumptions on the calculations, and the effect of real-world results that do not match those assumed. The expands on the material from AT731 by addressing multiple life and multiple decrement functions. The latter part of the course focuses on Multiple State/Markov Chains and pension mathematics. The material covered in this course may help students prepare for SoA Exam LTAM.
• MET AT 741: Actuarial Statistics I
This course provides students with the mathematical background to non-life models, such as medical and automobile insurance. Topics covered include severity loss models for claims and frequency models for occurrence of those claims. The severity and frequency models are then brought together, and aggregate models are addressee. During the semester, students are presented with modification to both severity and frequency models including deductibles and claims limits. The course emphasizes applications of statistical principles in actuarial models and modeling. The material covered in this course may help students prepare for SoA Exam STAM and CAS Exam MS II.
• MET AT 742: Actuarial Statistics II
This course expands on the material covered in AT741 ("Actuarial Statistics I)" by expanding the discussion of Aggregate Models. Actuarial statistical models are then addressed, including evaluation of both complete and incomplete data. Estimators for the actuarial models are developed in concert with these topics. The course also covers mathematical models for specific types of insurance, such as medical, automobile, and disability insurance. Credibility models comprise the final topic for the course, and the Buhlmann-Straub credibility model and Bayesian methods are discussed. The material covered in this course may help students prepare for SoA Exam STAM and CAS Exam MS II.
• MET AT 743: Regression and Time Series
Undergraduate Prerequisites: CASMA582 or METMA582 Mathematical Statistics, or consent of instructor
Part I of this course will cover simple and multiple regressions, serial correlation, and heteroscedasticity, analysis of residuals, and stepwise analysis techniques. Part II will cover time series analysis including smoothing and extrapolation of time series, linear time series models, model building procedure, and forecasting, as well as case studies.
• MET AT 751: Individual Insurance Applications of Actuarial Principles
This course covers the application of basic actuarial principles to individual life and annuity financial security systems. Material covered will include the purpose of these systems, the development of financial security products, risk classification, actuarial pricing assumptions, the calculation of product cash flows, the purpose of reserves and different reserve methods. Taxation, required capital, profit measurement, and reinsurance considerations will also be studied.
• MET AT 752: Group Insurance Applications of Actuarial Principles
This course covers the application of basic actuarial principles to group life and group health financial security systems. Material covered will include the purpose of these systems, financial security product design and development, underwriting and risk management, premium determination, and the funding and valuation of group life and group health financial security systems. Group systems in the United States will be emphasized, but the course will also review the Canadian health system.
• MET AT 754: Casualty Insurance Principles
MET AT 754 is a survey of the Property and Casualty Industry from an actuarial science perspective. Topics will include the theory of insurance, including what risks are insurable, how to calculate premiums on them, and pay losses on the inevitable claims; the history of the insurance industry, focusing on court cases that shaped the current regulatory structure; the basic policy structures of homeowners, auto, and liability insurance; and reinsurance.
• MET AT 761: Mathematics for Investment and Portfolio Theory
Undergraduate Prerequisites: MET MA 225, CAS MA 581, and MET AT 721
This course covers the risk and return characteristics of primary financial products, fundamental principles of modern portfolio theory, term structures and yield curves, Markowitz Portfolio Selection Model, CAPM and its applications to portfolio management, derivative securities, duration, immunization, and interest rate risk management.
• MET AT 762: Mathematical Finance for Actuarial Science
Undergraduate Prerequisites: MET MA 581 and MET AT 721.
This course covers the analysis of derivative products and their use in insurance and risk management strategies. It covers selected aspects of rational valuation of derivative products like put-call parity, binomial option, and Black Scholes option pricing model.
• MET AT 782: Pension Mathematics and Mortality Tables
Undergraduate Prerequisites: (MET MA581 or CAS MA581) and MET AT721
This course covers pension actuarial funding methods and the use of life contingencies. Included are analyses of actuarial funding methods under eight different models, the computations under each, and their uses in pension plans throughout the world. Mortality tables are discussed, including the development of tables under the Makeham mortality model and the use of existing mortality tables, the modification to reflect mortality improvement in each, and the reasons an actuary would or would not consider doing so. Alternative forms of pension payment are discussed.
• MET AT 981: Internship in Actuarial Science I
The course is offered to students who seek practical applications of actuarial principles in insurance companies, financial institutions, pension consulting firms, and other related fields.
• MET AT 982: Internship in Actuarial Science II
Graduate Prerequisites: MET AT722 and AT731 and cumulative GPA of 3.3 or higher and consent of instructor
The course is offered to students who seek practical applications of actuarial principles in insurance companies, financial institutions, pension consulting firms, and other related fields. The course requires students to participate in an internship program within the industry. Students need to submit monthly progress reports and a final semester report to the Chairman, Department of Actuarial Science at Boston University.
• MET AT 991: Directed Studies I
The course is offered to students who plan to engage in special research topics under the supervision of a faculty advisor. Application is made through the Department of Actuarial Science.
• MET AT 992: Directed Studies II
The course is offered to students who plan to engage in special research topics under the supervision of a faculty advisor. Application is made through the Department of Actuarial Science.
• MET MA 581: Probability
Undergraduate Prerequisites: MET MA 225, or CAS MA 225, or MA 230.
Graduate Prerequisites: MET MA 225 or CAS MA 225 or CAS MA 230.
Basic probability, conditional probability, independence. Discrete and continuous random variables, mean and variance, functions of random variables, moment generating function. Jointly distributed random variables, conditional distributions, independent random variables. Methods of transformations, law of large numbers, central limit theorem.
• MET MA 582: Mathematical Statistics
Undergraduate Prerequisites: MET MA 581, or CAS MA 381, or MA 581.
Graduate Prerequisites: MET MA 581 or CAS MA 381 or CAS MA 581.
Interval estimation. Point estimation including sufficiency, Rao-Blackwell theorem, completeness, uniqueness, Rao-Cramer inequality, and maximum likelihood estimation. Tests of hypothesis: uniformly most powerful tests, uniformly most powerful unbiased tests, likelihood ratio test, chi-squared test, comparison of means and variances, ANOVA, regression, and some nonparametric tests.