Probability for Risk Management [Hardcover]

Product Details

• Hardcover: 434 pages
• Publisher: ACTEX Publications
• Language: English
• ISBN-10: 156698548X
• ISBN-13: 978-1566985482
• Product Dimensions: 8.9 x 5.9 x 1.2 inches
• Shipping Weight: 1.6 pounds
• Average Customer Review: 4.2 out of 5 stars  See all reviews (15 customer reviews)
• Amazon Best Sellers Rank: #356,813 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

72 of 74 people found the following review helpful:

5.0 out of 5 stars Not everything you need, but what you need, January 15, 2004

By A Customer

This review is from: Probability for Risk Management (Paperback)

I passed the SoA/CAS Course 1/Exam 1 with this book and then got an actuarial position immediately after that (so, I guess, the actuarial exams and being an actuary ARE at my level). It is exactly at the level of understanding needed to pass the exam, no more, no less. After all, your goal is just to pass; that is it. My only admonishment is that it should not be your only source of study for probability for the exam: the exam questions are too unpredictable for that. If used in conjunction with past exams, though, you should succeed.

I took an honors course in probability in college using Ross's book. It was useless (so was the class) and is totally inappropriate for the exam. It routinely used distributions (e.g., Pareto, lognormal) in its questions that if they EVER show up on an exam, you can pass if you skip them.

I also bought Probability: Science of Uncertainty. I will not go so far as to call it a waste of money, but it only added perspective to my studies, not knowledge. Its practice questions were also not very helpful.

If you are studying for an actuarial exam, Probability for Risk Management will get you there. After the first eleven chapters you will be able to understand the solutions to the past exam problems, which is where most of your study time should be spent anyway.

Of the books on the syllabus, this is the one to buy.

39 of 40 people found the following review helpful:

4.0 out of 5 stars Great for beginners / Skip if you're advanced, June 9, 2006

By 

J. Laux (Chicago, IL) - See all my reviews
(REAL NAME)   

This review is from: Probability for Risk Management (Paperback)

If you're looking at this book, presumably you're looking to study for the first actuarial exam P/1. I took the exam in February and scored a 9. I used this book, as well as the Sam Broverman Actex study guide and an Actex online course. This may have been overkill, but I was changing careers and wanted to be sure I'd have the resources to pass. Anyway.

While I wish there were 1 study guide or textbook that covered all the bases for all people, I'm skeptical that such a guide really exists. When deciding how to prep for exam P/1, students should consider how much they already know of the material. If you have a pretty decent statistics/probability background, a study guide from Actex or ASM might be better. If you need a more thorough discussion of basic probability & the motivation behind certain concepts, a textbook may be better. Personally, I think it's worth consulting at least 2 sources anyway just because different authors will have different styles and points of emphasis.

I like this book a lot, for what it is. It's among the most readable math books I've ever read. It uses very conversational language which makes it easy to follow, as other reviewers have pointed out. From what I've seen of Hassett & Stewart's Course 3 manual it has the same nice readable qualities. These guys do a nice job making the math accessible. They present each of the probability distributions and briefly describe the relative merits of each. There is intentionally very little theoretical discussion of the material, which may disappoint some readers, but there's no theory on the exam anyway, so the book seems to make a wise choice.

However, this book does have several shortcomings, and I believe you'll need additional resources to pass the first exam. The shortcomings are:

1) Some of the hardest problems on Exam 1 involve taking double integrals to solve for random variables with joint distributions or marginal distributions. If you've taken an advanced calculus course recently, you're probably fine with this stuff. I was somewhat rusty, and this book offers only a brief discussion of how to integrate these things. Really this is more of a calculus issue than a probability issue, but I wish the authors had spent more time on it since it can be confusing.

2) Generally, the exercises in this book in no way resemble actual SOA/CAS exam problems. It's nice to do some easy problems to make sure you understand the concepts, but you'll need to practice with a LOT of past exam problems to understand how you'll be expected to apply the material on the exam. You can of course get these for free from the SOA site, or buy a different study guide that has more exam problems.

3) The book doesn't cover more advanced & obscure topics that sometimes surface on exam 1. I had a problem on second-order statistics on the first exam that stumped me; I know Broverman had discussed it but this book had not. I don't think this is a huge drawback; probably there are only 1 or 2 questions on the exam that may not be explained by this book's content.

Again, just to sum up, this is a great text to prep for Exam 1 if:
-You want a nice, readable discussion to the material and you don't have a solid background already, specifically in the more advanced topics.
-You don't mind using another study guide or practice exams to get more experience with real exam problems.

And here are some reasons why you may want to avoid this book:
-You already have a decent grasp of probability & statistical distributions and are just looking for something to tell you what you need to know, without a lot of fuss or explanation. Buy a study guide instead. I didn't like the Broverman very much, but I'm sure some people do, and there are probably better guides out there too.
-You want to buy one book that will have everything you need to pass the exam. (As I said above, I'm skeptical about this approach, but I'm sure it's been done.)

Maybe I should have rated this book lower, but I think it does very well what it intends to do - the real question is whether you're among the intended audience or not.

44 of 50 people found the following review helpful:

4.0 out of 5 stars probability for risk management, April 18, 2000

By A Customer

This review is from: Probability for Risk Management (Paperback)

This book is readable, easy to understand, and informative. It is recommended by the Society of Actuaries for the SOA/CAS Course 1 exam. I taught myself probability for the exam from this book.