CAS Exam 6C Spring 2019, Question 26

Study guide: Exam 6C

Part a (0.5 points)

Briefly describe the following terms:

• i. Model
• ii. Model risk

Part b (1.5 points)

In evaluating model risk exposure, an actuary can assess the severity and likelihood of failure in a model. Identify three considerations for each of the following metrics:

• i. Severity of model failure
• ii. Likelihood of model failure

Answer this question and see the worked solution

Concepts tested

• Model Risk
• Standards of Practice

More questions from this set

• CAS Exam 6C Spring 2019, Question 25