Dear Students,
By now, you should be able to see when your Fall enrollment time begins in MyUCLA. The schedule of classes goes live on Monday, June 4th and priority pass will begin on Monday, June 18th. As a quick reminder, all upper division courses are restricted to math majors and minors only during the first pass. All remaining seats will be open to all majors once second pass begins and certain courses will be closed again during summer orientation (more information will be sent out later).
Following up on the last email to all students who are interested or continuing in the FAM major, here are the current updates on courses. The FAM major requirements (https://www.math.ucla.edu/ugrad/majors/fam) will remain the same: 12 lower division courses and 11 upper division courses. However, the actuarial courses have been restructured in part because of the changes to the exam syllabi posted by the SOA. Additionally, there are several new courses. These are listed below, and at the end of this message you will find instructions about fulfilling the requirements of the major with these new courses. In no case will the requirements be harder or will progress be delayed. If you have questions, please contact an adviser in the Undergraduate Office.
The actuarial offerings for next year are:
Fall 2018  Winter 2019  Spring 2019  
102Advanced Financial and Actuarial Problem Solving 
Sec. 1 Barekat  Sec. 1 Barekat  
174BTopics in Financial Engineering 

Sec. 1 Taylor  Sec. 1 Blasius 
174EMathematics of Finance 
Sec. 1 Lim 
Sec. 1 Blasius Sec. 2 Menz 
Sec. 1 Taylor Sec. 2 Barekat 
177Theory of Interest and Application 
Sec. 1 Ozel  Sec. 1 Ozel  Sec. 1 Ozel 
178AFoundations of Actuarial Mathematics: Life Insurance 
Sec. 1 Ozel  Sec. 1 Lim  
178B Foundations of Actuarial Mathematics: Further Topics in Long Term Actuarial Math 
Sec. 1 Menz  Sec. 1 Ozel  Sec. 1 Lim 
178C Foundations of Actuarial Mathematics: Loss models 
Sec. 1 Menz  Sec. 1 Ozel  
192Financial & Actuarial Practicum 
Sec. 1 
The actuarial courses for next year are:
1.) Math 177  Theory of Interest and Applications. A replacement of Math 175.
 Description
 Lecture, three hours; discussion, one hour. Requisite: course 32B. Types of interest, time value of money, annuities and similar contracts, loans, bonds, portfolios and general cash flows, rate of return, term structure of interest rates, duration, convexity and immunization, interest rate swaps, financial derivatives, forwards, futures, and options. Letter grading.
 Textbook
 A.) Broverman, Samuel A. Mathematics of Investment and Credit. 7th ed., Actex Publications, 2017.
 B.) Bean, Michael A. (FSA, CERA FCIA, FCAS, PHD). Determinants of Interest Rates. Society of Actuaries, 2017. Education and Examination Committee of the Society of Actuaries  Financial Mathematics Study Note.
 https://www.soa.org/Files/Edu/2017/fmdeterminantsinterestrates.pdf
 C.) Alps, Robert (ASA, MAAA). Using Duration and Convexity to Approximate Change in Present Value. Society of Actuaries, 2017. Education and Examination Committee of the Society of Actuaries  Financial Mathematics Study Note.
 https://www.soa.org/Files/Edu/2016/edu2016fm2417usingdurationconvexity.pdf
 D.) Beckley, Jeffrey (FSA, MAAA). Interest Rate Swaps. Society of Actuaries, 2017. Education and Examination Committee of the Society of Actuaries  Financial Mathematics Study Note.
 https://www.soa.org/Files/Edu/2017/fminterestrateswaps.pdf
 Topics
 Interest Rates and their Representation.
 Annuities.
 Loans and Bonds.
 Rate of Return.
 Term Structure of Interest Rates.
 Duration and Immunization.
 Interest Rate Swaps.
 Introduction to Financial Derivatives.
 Advanced problem analysis.
 Objectives
This is the first course with financial content of the FAM major. All later courses presume familiarity with many of the concepts introduced. Content includes numerous foundational concepts of financial mathematics, especially those from the theory of interest rates. Since one goal of the course is to help students prepare for the challenging exam FM (Financial Mathematics) of the Society of Actuaries, two classes before each midterm will be devoted to analysis of complex FM exam problems. While the basic ideas are mathematically elementary, their applications can be complex. The class is suitable for students who seek a career in financial engineering, the actuarial field, banking, etc., or who are seeking to improve their financial literacy in a highly quantitative way.
 Learning Outcomes
Student will be able to define concepts and solve problems of a type and difficulty similar to those on the SOA FM exam. The problems require using the following standard concepts of financial mathematics: interest rate, simple interest, compound interest, accumulation function, future value, current value, present value, net present value, discount factor, discount rate, convertible mthly, nominal rate, effective rate, inflation and real rate of interest, force of interest, equation of value, annuity, annuityimmediate, annuity due, perpetuity, payable mthly or payable continuously, level payment annuity, arithmetic increasing/decreasing annuity, geometric increasing/decreasing annuity, term of annuity, loan, principal, interest, term of loan, outstanding balance, final payment (drop payment, balloon payment), amortization, bond, price, book value, amortization of premium, accumulation of discount, redemption value, par value/face value, yield rate, coupon, coupon rate, term of bond, callable/noncallable, yield rate/rate of return, dollarweighted rate of return, timeweighted rate of return, current value, duration (Macaulay and modified), convexity (Macaulay and modified), portfolio, spot rate, forward rate, yield curve, stock price, stock dividend, cash flow matching, immunization (including full immunization), Redington immunization, swap rate, swap term or swap tenor, notional amount, market value of a swap, settlement dates, settlement period, counterparties, deferred swap, amortizing swap, accreting swap, interest rate swap, net payments, components of interest rates including: real riskfree rate, inflation rate, default risk premium, liquidity premium, and maturity risk premium, financial derivative, futures contract, forward contract, options, puts, calls.
 Examples of typical problems include:
 calculating the market value, notional amount, spot rates or swap rate of an interest rate swap
 constructing an investment portfolio to Redington (or otherwise) immunize a set of liability cash flows
 calculating the duration (modified or Macaulay) and convexity of a cash flow
 calculating the missing item, given any four of: term of loan, interest rate, payment amount, payment period, principal.
2.) Math 178A  Foundations of Actuarial Mathematics: Life Insurance and Annuities. Covers roughly Math 172B + first part of Math 172C.
 Description
 Lecture, three hours; discussion, one hour. Requisite: course 32B, 177, 170A or 170E or Statistics 100A. An introductory course on to the mathematics associated with long term insurance coverages. Single and multiple life survival models, annuities, premium calculations and policy values, reserves, pension plans and retirement benefits. Letter grading.
 Textbook
 Dickson, David C.M., Hardy, Mary R. and Waters, Howard R., Actuarial Mathematics for Life Contingent Risks. 2nd ed., Cambridge University Press, 2013.
 Topics
 Life Insurance and Survival Models.
 Life Tables and Selection.
 Valuation of Insurance Benefits.
 Variable Benefits.
 Valuation of Annuities.
 Premiums.
 Policy Values.
 Objectives
This sequence is the actuarial core of the FAM major. 178A and the first half of 178B cover the syllabus of the SOA LTAM exam. By the end of 178A , students will be able to value and set premiums for insurance instruments of numerous types using traditional actuarial models. They will also understand the typical models of life contingencies which are used in the calculations
 Learning Outcomes
The student will understand: typical models for life insurance and annuities used to calculate their expected present values, premiums or contributions, and reserves. For example, for premium calculations, the student will be able to calculate premiums based on the equivalence principle, the portfolio percentile premium principle, and profit testing, calculate probabilities, means, variances, and percentiles of random variables associated with a premium, and apply appropriate approximation methods such as uniform distribution of deaths, constant force, Woolhouse, and Euler.In terms of problem solving, the student will be able to solve problems of a type similar to those on the Society of Actuaries LTAM exam and which need only the portion of that syllabus covered by 178A
 Weekly Syllabus
 Week 1: Life insurance and survival models; Readings in DHW Chapter 1, Chapter 2, 2.22.3
 Week 2: Survival models (cont.) and Life tables; Readings in DHW Chapter 2, 2.42.7, Chapter 3, 3.13.3
 Week 3: Life tables and selection; Readings in DHW Chapter 3, 3.33.13
 Week 4: Valuation of insurance benefits; Readings in DHW Chapter 4, 4.14.5
 Week 5: Variable benefits; Readings in DHW Chapter 4, 4.64.8
 Week 6: Valuation of Annuities; Readings in DHW Chapter 5, 5.15.10
 Week 7: Valuation (end) and Premiums; Readings in DHW Chapter 5, 5.115.14, Chapter 6, 6.16.6.
 Week 8: Premiums (continued), Policy Values, Readings in DHW Chapter 6, 6.76.10, Chapter 7, 7.17.3.1
 Week 9: Policy Values (continued); Readings in DHW Chapter 7, 7.37.4
 Week 10: Other topics; Readings in DHW Chapter 7, 7.5, 7.87.9
3.) Math 178B  Foundations of Actuarial Mathematics: Further topics in Long Term Actuarial Mathematics. Covers second half of Math 172C + first half of Math 173A.
 Description
Lecture, three hours; discussion, one hour. Requisite: course 32B, 177, 178A, 170B or 170S or Statistics 100B. Second part of the three quarter sequence Mathematics 178ABC. Multiple state models, pensions, profit testing, topics from statistics, esp. methods of estimation, and background material on probability distributions, especially those used in actuarial work. Letter grading.
 Textbook
 A.) Dickson, David C.M., Hardy, Mary R. and Waters, Howard R, Actuarial Mathematics for Life Contingent Risks. 2nd ed., Cambridge University Press, 2013.
 B.) Hardy, Mary R., LongTerm Actuarial Mathematics Study Note. Society of Actuaries, 2017. Education and Examination Committee of the Society of Actuaries  Long Term Actuarial Mathematics Supplementary Note.
 https://www.soa.org/Files/Edu/2018/2018ltamsupplementarynote.pdf
 C.) Klugman, Stuart A., Panjer, Harry H., Willmot, Gordon E., Loss Models: From Data to Decisions. 4th ed., Wiley, 2012.
 Topics
 Multiple State Models.
 Long Term Coverages in Health Insurance.
 Multiple State Models for Long Term Health and Disability Insurance.
 Recursions for Policy Values with Multiple States.
 Joint Life and Last Survivor Benefits.
 Pension mathematics.
 Emerging Costs for Traditional Life Insurance.
 Basics distributional Quantities.
 Characteristics of Actuarial Models.
 Continuous Models.
 Discrete Distribution.
 Objectives
The three quarter sequence 178ABC is the actuarial core of the FAM major. 178A and the first half of 178B give almost complete coverage the syllabus of the SOA LTAM exam. By the end of 178A, students are able to value and set premiums for insurance instruments of numerous types using traditional actuarial models. By the end of 178A, they will also understand the typical models of life contingencies which are used in the calculations. 178B first extends this work to multistate models, then covers pensions, health insurances, and profittesting. The last three weeks of the course will focus on the probability distributions employed most commonly in actuarial theory. This begins the study of the Short Term Actuarial Mathematics syllabus.
 Learning Outcomes
Students will be able to work with parametric and nonparametric (multistate) survival models including single life, multiple life, and multiple decrements, all in both continuous and discrete time. Students will be able to work with key examples from the health field (disability, long term care, critical illness, and long term care) insurance. Students will understand basic pension mathematics including their funding and the profittesting of life insurance. Students will be able to work with parametric families of probability distributions used commonly for modeling severity, frequency and aggregate risk in the actuarial field, and their basic properties.In terms of problem solving, the students will be able to solve problems similar to those on the Society of Actuaries LTAM and STAM exams which is covered by a portion of that 178B.
 Weekly Syllabus
 Week 1: Multiple State Models; Readings from DHW Chapter 8, 8.18.7
 Week 2: Multiple Decrement Models; Readings from DHW Chapter 8, 8.88.13
 Week 3: Further examples; Readings from 2018ltamsupplementarynote(2).pdf, Section 24
 Week 4: Joint life and last survivor benefits; Readings from DHW Chapter 9, 9.19.8
 Week 5: Pension Mathematics; Readings from DHW Chapter 10, 10.110.6
 Week 6: Pension Math and Midterm; Readings from DHW Chapter 10, 10.7
 Week 7: Cash Flow Analysis for Life Insurance, Introduction to Tails; Readings from DHW Chapter 12, 12.112.8, KPW Chapter 3, 3.13.3
 Week 8: Tails and Measures of Risk; Readings from KPW Chapter3, 3.43.5, Chapter 4, 4.14.2
 Week 9: Intro to Actuarial models; Readings from KPW Chapter 5, 5.15.4, Chapter 6, 6.16.3.
 Week 10: Important Discrete Distributions; Readings from KPW Chapter 6, 6.46.6
4.) Math 178C  Foundations of Actuarial Mathematics: Loss models. Covers second half of Math 173A + Math 173B.
 Description
Lecture, three hours; discussion, one hour. Requisite: course 32B, 177, 178B, 170B or 170S or Statistics 100B. Third part of the three quarter sequence Mathematics 178ABC. Loss models associated with actuarial problems, severity, frequency, and aggregate loss models, parameter estimation (frequentist, Bayesian), model selection and credibility. Letter grading.
 Textbook
A.) Klugman, Stuart A., Panjer, Harry H., Willmot, Gordon E., Loss Models: From Data to Decisions. 4th ed., Wiley, 2012.
B.) Hardy, Mary R., LongTerm Actuarial Mathematics Study Note. Society of Actuaries, 2017. Education and Examination Committee of the Society of Actuaries  Long Term Actuarial Mathematics Supplementary Note.
https://www.soa.org/Files/Edu/2018/2018ltamlossmodels.pdf
C.) Klugman, Stuart A., Panjer, Harry H., Willmot, Gordon E., Chapters 10–12 of Loss Models: From Data to Decisions. 5th ed., Society of Actuaries, 2018. Education and Examination Committee of the Society of Actuaries  LongTerm Actuarial Mathematics Study Note.
https://www.soa.org/Files/Edu/2018/2018ltamlossmodels.pdf
 Topics
 Frequency and Severity with Coverage Modifications.
 Aggregate Loss Models.
 Estimation Based on Empirical Data.
 Frequentist Estimation.
 Frequentist Estimation for Discrete Distribution.
 Bayesian Estimation.
 Model Selection.
 Introduction and Limited Fluctuation Credibility.
 Greatest Accuracy Credibility.
 Objectives
The three quarter sequence 178ABC is the actuarial core of the FAM major. 178C covers topics associated with short term actuarial risk. With 178B, most of the topics 17 on the SOA STAM exam are covered.
 Learning Outcomes
Students will be able to analyse or construct: frequency and severity models with coverage modifications, aggregate loss models, with modifications, and their recursive construction, use maximum likelihood or Bayesian methods to estimate model parameters, estimate the variance of estimators, test hypotheses (using chisquare, KolmogorovSmirnov or likelihood ratio tests), estimate losses using credibility procedures (Bayesian, Buhlmann, and BuhlmannStraub methods).In terms of problem solving, the students will be able to solve problems similar to those on the Society of Actuaries STAM exam and which is covered by a portion of 178C. With 178B, both courses will cover most of that syllabus.
 Weekly Syllabus
 Week 1: Frequency and Severity models; Readings from KPW Chapter 8
 Week 2: Aggregate loss models; Readings from KPW Chapter 9, 9.19.3
 Week 3: Aggregate loss models (continued); Readings from KPW Chapter 9, 9.49.8
 Week 4: Empirical estimation; Readings from SOA Handout
 Week 5: Empirical Estimation (continued); Readings from SOA Handout
 Week 6: Midterm and Maximum Likelihood Estimation; Readings from KPW Chapter 13, 13.2
 Week 7: Frequentist Estimation; Readings from KPW Chapter 13, 13.313.4, Chapter 14, 14.114.4, 14.6
 Week 8: Bayesian Estimation; Readings from KPW Chapter 15, 15.115.3
 Week 9: Model Selection; Readings from KPW Chapter 16, 16.116.5, 2018stamlossmodelsdata.pdf.
 Week 10: Introduction to Credibility Theory; Readings from KPW Chapter 17, 17.117.5, Chapter 18, 18.418.6.
Fulfilling Requirements for the FAM degree:
All actuarial majors are required to finish a full actuarial sequence for the major. As for the three courses within "actuarial, economics or statistics", you still have the option of Econ 101199, Stats 100C in addition to Math 156 (Machine Learning), Math 164 (Optimization) and Math 171 (Stochastic Process). Here is a road map for those who are about to begin the actuarial sequence or in the middle of the sequence:
For example, if a student has completed Math 172B or Math 173A, he/she should take Math 178B. If a student has not taken Math 172B or Math 173A (has not started any of the actuarial sequences), he/she should begin the new sequence  Math 178A. If a students has completed an actuarial sequence, Math 172BC or Math 173AB, then he/she has fulfilled that part of their major requirement. For those who are in the low GPA category, it is highly recommended that you email ugrad@math.ucla.edu or come in during drop in counseling to see what class you should exactly take since there are some content overlap. Options will vary and be on a case by case basis during this transition period.
As a quick reminder, we highly recommend actuarial students take the Math 170E and 170S route in lieu of Math 170A and 170B to ensure you learn some statistics which is crucial to the actuarial field.
5.) Math 170E  Introduction to Probability and Statistics: Part I Probability
Lecture, four hours. Requisites: courses 31A and 31B. The Math 170E and 170S two quarter probability and statistics sequence is aimed to equip MathEcon and Financial Actuarial majors with essential skills in these areas. Math 170E is an introduction to probability theory. Topics include discrete (binomial, Poisson, etc.) and continuous (Exponential, Gamma, Chisquare, normal) distributions, bivariate distributions, distributions of functions of random variables (including moment generating functions and Central Limit Theorem). Letter grading.
6.) Math 170S  Introduction to Probability and Statistics: Part II Statistics
Lecture, four hours. Requisites: courses 31A, 31B, and 170E. The Math 170E and 170S two quarter probability and statistics sequence is aimed to equip MathEcon and Financial Actuarial majors with essential skills in these areas. Math 170S is an introduction to statistics. Topics include sampling; estimation and the properties of estimators; construction of confidence intervals and hypotheses testing. It is designed to meet the Society of Actuaries' VEE Requirements for Mathematical Statistics. Letter grading.
Further Courses: These are not currently required for the major but are meant to allow students to further their knowledge and/or make themselves more marketable.
7.) Math 179  Topics in Financial Engineering
An optional course for students who want to learn more( beyond the content of 174E) about financial derivatives and risk management. It will also cover topics in finance such as meanvariance portfolio theory, Capital Asset Pricing model, etc. that are on the IFM exam but not in 174E.
8.) Math 102  Advanced Financial and Actuarial Problem Solving
An optional course to help students study for actuarial exams. Initially, 102’s will focus on exams P, FM, and IFM. 102 will be an active learning course, and one component will involve students presenting their work, with evaluation of presentation.
9.) Math 192  Financial and Actuarial Practicum
An optional course for students who want to explore the different activities of actuaries and/or improve their soft skills (communication, writing, presentation, etc.). Outside speakers from the profession will come to present interesting topics in the field, including new areas. For the latter, topics mentioned have included selfdriving cars and pet insurance. Some weeks, students will present. This will be offered first in Spring 2019.
If you have any further questions, please email the office at ugrad@math.ucla.edu with your name, student ID number and specific question or come to drop in counseling (we are open throughout the summer).
UCLA Mathematics Department