Diploma in Actuarial Science

Self-Study Guidance

This is based on information provided to new students by the UK Actuarial

Profession.

All students are expected to have the following mathematical skills and
knowledge before commencing the course. Although we may introduce some
brief revision of the material, none of this is taught and students who don’t have
the requisite probability and statistics background should not expect to be able
to complete every module.

Pre-calculus:

A Permutations & combinations; expansion of (a+x)ⁿ

B Using the sigma notation to express the sum of a series
C Summing the terms of an arithmetic progression and a geometric progression
D Interpolation and local approximation

Elementary calculus:

A The idea of a limit

B Differentiation of polynomial, exponential and logarithmic functions
C Product, quotient and “function of a function” rules for differentiation
D Definite and indefinite integration of polynomial and exponential functions
E Area under a curve
F Methods of numerical integration
G Integration by substitution and by parts

More advanced calculus:

A Higher order derivatives

B Finding turning points of simple functions with polynomial and exponential terms,
curve sketching
C Maximisation under constraints: method of Lagrange multipliers
D Taylor’s theorem; power series expansion for exp(x)
E Differentiation of definite integrals: Fundamental Theorem of the Calculus
F Solving first order differential equations: exact, separable (including logistic),
linear
G Second order differential equations with constant coefficients: complementary
function and particular integral

Calculus of two variables:

A Partial derivatives of functions of two variables

B Maxima and minima of functions of two variables
C Double integrals and changing the order of double integrals
Algebra:

A Matrix addition and multiplication

B Determinant and inverse of a square matrix
C Using matrices and vectors to represent linear equations
D Solving simultaneous linear equations
E Complex numbers
F Linear difference equations with constant coefficients

Probability:

A Sample spaces, events

B The probability of an event
C Basic rules of probability
D Conditional probability
E Independent events
F Bayes Theorem
G Tree diagrams

*we recommend that students who don’t know this material don’t register for the
Stochastic Modelling and Financial Economics 2 modules.

Statistics:

A Diagrams and displays

B Summary measures of level and variability (including standard deviation)
C Random variables
D Expectation
E Binominal and Poisson distributions
F Normal (Gaussian) distribution

Recommended Text Books for Revision/Self-Study

The “Schaum Outline” series from McGraw Hill is good for the fundamentals of
mathematics (ask in your bookshop or library – or visit the website www.schaums.com)

In particular:
Advanced Calculus by Wrede & Spiegel
Probability & Statistics by Spiegel, Schiller & Srinavasan.

Other recommended books include:

Elementary analysis: the theory of calculus: Ross: Springer
A concise introduction to pure mathematics: Leibeck: Chapman & Hall
Calculus with analytic geometry: Fraleigh: Addison Wesley
Fundamentals of university mathematics: McGregor et al: Albion
Miller & Miller: John E Freund’s Mathematical Statistics: Prentice Hall
Essential Statistics: Rees: Chapman & Hall.