So I was going to do a post giving you an example of one of Scott's problems from the actuary exam he will take on the 15th. I was also going to offer a TI 89 (code for super cool calculator) to anyone who could come up with the right answer. I ran into two problems.
1. I don't have a TI 89 to give out to the winner.
2. Apparently the computer doesn't have any way to do math equation symbols that I need to be able to type to give you the problem.
...Oh boy, oh boy! Are you in luck. We found one without funny looking lines and Greek symbols that I can post. Here we go. And since I have already admitted I don't have a TI 89, I will give out the most amazing bread recipe to the person who gets the right answer. Good luck. Oh, and trusts me, you will at least want to take a stab at it cause this is seriously the best bread EVER... and its healthy.
CRAZY ACTUARY EXAM QUESTION SAMPLE
Which of the following statements in incorrect?
1. The Sharpe ratio will increase if the risk-free rate decreases.
2. The Sharpe ratio will decrease if the expected rate of return decreases.
3. Assets whose prices are not perfectly correlated cannot have the same Sharpe ratio.
4. The Sharpe ratio equals the risk premium of an asset divided by the volatility of that asset.
5. The Sharpe ratio will decrease if the volatility of the asset increases.
Hint: this has to do with option prices (like with stocks).
Oh, and just for the record... I don't have a clue what any of that I just typed out means. I guess if I truly were a supportive wife I would try to understand what my husband is spending so much time doing. Sadly, I only know he is taking a test, and I am jealous of all the attention those books are getting.
3 comments:
I'm going with #3. I really have no idea, but that is the first one I decided was incorrect when I thought the question was asking for which one is correct. Oops. :)
Uhmm I didn't even really read the question because I got lost at bread recipe...can I just have the recipe even though I didn't attempt to answer the question. Is it your mom's recipe because I instantly went back to being a kid and eating homemade bread at your house that came right out of the oven with lots of butter.....yumm I want homemade bread now!
this one is easy...it's clearly #4 :)
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