The discount has a negative exponent, because the discount is the reciprocal of the interest rate. The interest rate is moving forward in time and the discount factor is working its way back into time. May I please have my like, MJ the Student Actuary?
Hey there again sorry for asking so many questions. I just have a few uncertainties abt actuarial science. So if I am doing a degree in actuarial scinece, regarding the exams, do I take the exams (CT1- CT 8/9 ) during the degree or after I've done with my degree? And shld I do a master after that? Thanks for ur info, much appreciated.
Amelia Ann At my university we didn't write the actual CT exams. Instead we did similar subjects and wrote the university's exams instead of the profession's exams. If we got a high mark for the university exam, we got an exemption from having to write the profession's CT exam. The profession would look at the university paper and set the exemption mark to what they felt was right. After my degree I did a post grad in actuarial science where we looked at subject CA1 and 2 Specialist Technical subjects of our choice. However each university is different and may do something different in their masters course.
weisheng tan Yeah the discount factor is not likely to be negative. The important thing is if its below or above 1. If it is below 1 it means the interest rate is positive and it will reduce the cashflow when it brings it back to time 0. It is above 1 it means the interest rate is negative and it will increase the cashflow when it brings it back to time 0. I think there are negative interest rates on some of the Swiss Bonds right now.
The discount has a negative exponent, because the discount is the reciprocal of the interest rate. The interest rate is moving forward in time and the discount factor is working its way back into time.
May I please have my like, MJ the Student Actuary?
GREAT VIDEO
Discounting goes backward in time thus becoming a negative exponent where as interests goes forward in time thus becoming a positive exponent
nice vid
The chapter 4 is missing
Hey there again sorry for asking so many questions. I just have a few uncertainties abt actuarial science. So if I am doing a degree in actuarial scinece, regarding the exams, do I take the exams (CT1- CT 8/9 ) during the degree or after I've done with my degree? And shld I do a master after that? Thanks for ur info, much appreciated.
Amelia Ann At my university we didn't write the actual CT exams. Instead we did similar subjects and wrote the university's exams instead of the profession's exams. If we got a high mark for the university exam, we got an exemption from having to write the profession's CT exam. The profession would look at the university paper and set the exemption mark to what they felt was right. After my degree I did a post grad in actuarial science where we looked at subject CA1 and 2 Specialist Technical subjects of our choice. However each university is different and may do something different in their masters course.
Is it just because that discount factor can't be negative?
weisheng tan Yeah the discount factor is not likely to be negative. The important thing is if its below or above 1. If it is below 1 it means the interest rate is positive and it will reduce the cashflow when it brings it back to time 0. It is above 1 it means the interest rate is negative and it will increase the cashflow when it brings it back to time 0. I think there are negative interest rates on some of the Swiss Bonds right now.
discounting factors must b very hard.....can you please tell me which ct papers to take first and in which order?