Actuarial Science

Bring out the significance of extreme value theory.

Introduction Extreme Value Theory (EVT) is a powerful statistical tool used in risk management, insurance, finance, and other fields to model and predict rare, extreme events. Unlike traditional statistical models that focus on average behavior, EVT deals with the tail ends of distributions—those rare but potentially catastrophic events such as financial crashes, natural disasters, or […]

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Define the term risk. Discuss various categories of risk. How is valuation of risk made?

Introduction In economics, finance, and insurance, the concept of risk plays a foundational role. Risk refers to the possibility that an outcome or investment will not meet expectations, resulting in a loss or deviation from the anticipated result. Actuarial economics, in particular, involves assessing, pricing, and managing different types of risks. This post explores the

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