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# How Risk Adverse are You — for an Actuary?

As most of us actuaries know, we are a group of risk-averse people. Right? Naturally, I don’t want to generalize a whole group of professionals into a specific risk category, however from my personal experience of working with many other actuaries, I have come to realize that many of us are in fact conservative by nature. Now I don’t mean conservative in the political sense, but the normal everyday decisions that we make seem to have a built in conservatism to them. Judge for yourself by taking this simple test below to determine your level of actuarial conservatism!

1)  When making lunch reservations for 10 people that replied yes to your invite, you:
a. Reserve a table for 10.
b. Reserve a table for 12 just in case more people show up.
c. Reserve a table for eight since you know based on historical experience some people will not show up.

2) When getting to a 10 a.m. doctor’s appointment, you:
a. Plan to be there by 10 a.m.
b. Plan to be there by 9:45 a.m. just in case there is traffic.
c. Plan to be there by 10:15 a.m. since you know, based on historical experience, that the doctor is always late.

3)  You are sitting at the blackjack table. The dealer shows four and you have 11.
a. You hit.
b. You stay just in case you might catch a string of low cards.
c. You double down since you know that is the text book play.

4)  You are playing golf. The distance to the green is 150 yards with a water hazard in front and wind is blowing 20 M.P.H. from behind.
a. You hit your normal 7 iron.
b. You lay up to 100 yards using your sand wedge just in case the wind might knock your ball into the water.
c. You hit your 7 iron but choke down on the grip and do a three-quarter back swing to take into account the wind impact.

5)  You are walking down the hallway and see someone you recognize but do not remember his or her name. As you walk by, you:
a. Say. “Hey there!”
b. Take out your smartphone and pretend to take an urgent call while looking down.
c. Say, “Hi, Chris!” because you remember that, statistically speaking, that is the most common gender-neutral name.

6)  When making instant ramen noodles at home, you:
a. Eyeball the amount of water to put in.
b. Take out a measuring cup and add in a quarter cup more just in case.
c. Take out a weight scale in order to factor in the water volume displacement.

7)  You are purchasing a new smartphone, and you decide to buy:
a. The latest Apple iPhone.
b. A non-Samsung phone since they can catch on fire.
c. A Samsung Galaxy since they are now on discount and you figure, statistically, another fire is improbable.

a. The best car within your budget.
b. A compact car with the most efficient gas mileage and safety record.
c. A luxury car with premium options so that you will be most comfortable.

9)  You are attending the CAS Annual Meeting in Orlando and the first thing you do is:
a. Register for the meeting.
b. Book the hotel room before they are all sold out.
c. Book the flight since you figure there is always another hotel nearby and they take registration on site.

10) When investing for your retirement, you hold:
a. A mix of stocks and bonds.
b. A mix of cash and gold.
c. A mix of stocks, options, hedge funds and private equity investments optimized and rebalanced every calendar year taking into account future expected inflation trends.

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