CM2-Economic Modelling - Hindi English

CM2-Economic Modelling – Hindi English

₹25,700.00

CM2 – Economic Modelling – Regular Course.
Faculty: Praveen Patwari & Shivangee Agarwal along with other faculties
Course Duration: 200+ hours

Category:

CM2 – Economic Modelling

Build Expertise in Financial Engineering, Derivatives and Actuarial Risk Modelling

CM2 – Economic Modelling is one of the Core Principles subjects in the actuarial qualification pathway offered by the Institute and Faculty of Actuaries (IFoA), UK, and the Institute of Actuaries of India (IAI).

The subject focuses on applying mathematical, statistical and stochastic modelling techniques to understand financial markets, value derivatives, assess investment risks and estimate insurance liabilities.

CM2 combines financial economics, option pricing, asset valuation and general insurance reserving techniques. It develops the analytical and practical skills required to understand uncertainty, evaluate financial risks and apply actuarial models to real-world financial and insurance problems.

Course Structure & Syllabus

CM2 combines theoretical financial modelling with practical actuarial applications using Microsoft Excel.

Key Topics Covered:

  1. Financial Economics & Economic Theory:
    Utility theory, investor behaviour, rational expectations, market efficiency and fundamental principles of financial decision-making.
  2. Investment Risk & Portfolio Theory:
    Risk and return analysis, portfolio diversification, mean-variance portfolio theory, Capital Asset Pricing Model (CAPM) and investment risk measurement.
  3. Stochastic Models & Asset Valuation:
    Random walks, Brownian motion, stochastic processes, asset price models and financial market modelling.
  4. Financial Derivatives:
    Forward contracts, futures, options, swaps, derivative payoffs and financial hedging strategies.
  5. Option Pricing & Risk-Neutral Valuation:
    Binomial models, Black-Scholes-Merton model, arbitrage-free pricing, risk-neutral probabilities and option Greeks.
  6. General Insurance Reserving:
    Claims development triangles, run-off analysis, chain ladder techniques, Bornhuetter-Ferguson methods and estimation of outstanding claims liabilities.
  7. Simulation & Actuarial Modelling:
    Monte Carlo simulation, stochastic modelling, financial risk assessment and practical applications using Microsoft Excel.

The CM2 syllabus focuses on financial valuation, stochastic modelling, derivative pricing, insurance reserving and quantitative risk management, developing essential analytical skills for actuarial and financial applications.

Syllabus Topics & Weightages

The CM2 syllabus comprises five principal areas, with the following indicative weightages under the IFoA curriculum:

Topic Weightage
Rational Economic Theory 10%
Measures of Investment Risk 10%
Asset Valuations 30%
Liability Valuations 20%
Option Theory 30%
Total 100%

These weightages indicate the approximate syllabus coverage. Actual question distribution may vary between examination sittings.

Examination Structure

CM2 consists of two compulsory components: CM2A (Theory) and CM2B (Practical).

Both papers must be attempted during the same examination sitting.

Particulars IAI (India) IFoA (UK)
Paper A – Theory Objective + Descriptive Descriptive
Paper A Duration 3 Hours 15 Minutes 3 Hours 20 Minutes
Paper A Weightage 70% 70%
Paper B – Practical Excel-Based Excel-Based
Paper B Duration 1 Hour 45 Minutes 1 Hour 50 Minutes
Paper B Weightage 30% 30%
Examination Mode Centre-Based Online In-Person at Exam Centres or Remotely Invigilated Online

Important Examination Guidelines

  • Paper A: Evaluates theoretical concepts, numerical calculations, financial models and actuarial problem-solving. IAI includes objective and descriptive questions, while IFoA follows a descriptive examination format.
  • Paper B: Tests the practical application of financial and actuarial modelling techniques using Microsoft Excel.
  • Combined Assessment: Paper A contributes 70% and Paper B contributes 30% towards the final examination score.
  • IFoA Examination Mode: Students can indicate their preference to appear at an authorised examination centre or remotely through online invigilation. Final allocation is subject to availability and IFoA examination guidelines.
  • IAI Examination Mode: Examinations are conducted online at designated examination centres in accordance with IAI’s examination arrangements.
  • Examination Requirements: Students must comply with their respective institute’s guidelines regarding permitted calculators, actuarial tables, software and examination conduct.

Passing Criteria

The passing requirements differ between IAI and IFoA.

Institute Passing Requirements
IAI (India) Minimum 30% in each paper and 50% aggregate
IFoA (UK) Combined weighted marks must meet the pass mark determined for the examination sitting

Important Information:

  • Both Paper A and Paper B must be attempted in the same examination session.
  • IAI requires candidates to meet the minimum marks in each paper and the overall aggregate requirement.
  • IFoA determines the passing mark for each examination sitting and does not prescribe a separate minimum passing mark for each paper.
  • Candidates who do not clear CM2 must attempt both components again in a subsequent examination sitting.

Eligibility Criteria

CM2 is a Core Principles examination suitable for students developing their knowledge of financial mathematics and actuarial modelling.

  • Students can pursue CM2 through the IAI or IFoA examination pathway, subject to the respective institute’s eligibility and registration requirements.
  • A strong foundation in mathematics, probability, statistics and financial concepts is recommended.
  • Prior knowledge of CM1 concepts is beneficial, particularly interest theory and financial mathematics.
  • Under the IFoA pathway, students are not required to pass CM1 or any other actuarial examination before attempting CM2.
  • Students must satisfy the applicable membership, registration and examination entry requirements of their selected actuarial institute.

Learning Objectives

Studying CM2 develops the ability to:

  • Understand financial markets and economic modelling principles.
  • Apply stochastic processes to financial asset valuation.
  • Evaluate investment risk and portfolio performance.
  • Price financial derivatives using appropriate valuation models.
  • Apply risk-neutral valuation and hedging techniques.
  • Estimate general insurance claim reserves.
  • Use simulation and Excel-based modelling techniques.
  • Develop quantitative risk assessment and financial decision-making skills.

Practical Applications of CM2

The knowledge gained in CM2 is applicable across several actuarial and financial disciplines:

  1. General Insurance: Estimating outstanding claim reserves, analysing claims development patterns and evaluating insurance liabilities.
  2. Investment Banking: Pricing financial derivatives, analysing investment products and developing hedging strategies.
  3. Risk Management: Measuring financial market risk, modelling uncertainty and evaluating risk exposures.
  4. Portfolio Management: Analysing investment risk, portfolio diversification and asset valuation.
  5. Financial Engineering: Applying stochastic models, simulation techniques and mathematical valuation methods to financial products.

CM2 establishes essential knowledge in financial economics, stochastic modelling and insurance reserving, supporting advanced actuarial subjects such as CP1, CP2, SP5, SP6 and SP7.

Technical Requirements – AEI Learning Application

To access online classes, recorded lectures and digital study resources, students must ensure their devices meet the following minimum technical requirements of the Actuators Educational Institute (AEI) Learning Application.

Device / Platform Minimum Requirement
Android Android 9.0 or above
Windows PC / Laptop Windows 10 or above
iPhone / iPad (iOS) iOS 12.0 or above
MacBook / iMac (macOS) Apple M1 chip or above with macOS 14 or later
WHAT YOU WILL GET

Course Deliverables

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Recorded Lectures (A + B)
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Softcopy of AEI Own Study Materials
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Access to Student Dashboard
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Technical Support
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Chapter Wise MCQ Bank
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Regular Mentoring Sessions & Industry Expert Sessions
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Live Concept Classes (A + B)
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Mock Test with Detailed Evaluation (6 Sets)
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Hard Copy of AEI Own Compiler
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Course Extension (2 More Terms)
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Interactive Q & A Forum

Aditya ChaudharyAIR 1
Harsh AgarwalAIR 1
Mokshit KothariAIR 1
Praveen SanchetiAIR 1
Sourav SandhuAIR 1
Yash Agarwal90
Girdhari Lal89
Khyati Soni88
Mrigank Agarwal86
Nikhilesh Poddar86
Juhi Goyal85
Meghna Agarwal85
Siddharth Sonthalia85
Vandita Sarda85

FACULTY

Meet The Instructor


Praveen Patwari is a Chartered Accountant (CA), Financial Risk Manager (FRM) and Associate of the Institute of Actuaries of India (AIAI), with additional professional credentials including CIRA, CCRA, CIDT, CIIB and NISM Series VIII (Equity Derivatives). With over 15 years of experience in finance, actuarial education, mentoring and professional training, he has built a strong reputation for simplifying complex concepts and guiding students across multiple professional pathways.

As the Founder and Lead Mentor at Actuators Educational Institute (AEI), Praveen has taught and mentored 50,000+ students across Actuarial Science, FRM, CFA, finance and related professional programmes. He has mentored numerous rankers and top-performing students and is a regular speaker at leading institutions including SRCC, Miranda House, Hansraj College, Lady Shri Ram College, St. Xavier’s College, NMIMS, Ramjas College, NM College and HR College of Commerce.

Shivangee Agarwal is a globally qualified actuary holding the prestigious credentials of FIA (UK), FIAI (India) and FSA (USA), along with the C.Act designation, giving her professional recognition across three of the world’s leading actuarial bodies. She is also IFRI Certified, holds a Master’s in Data and Business Analytics from IIM Indore, and completed her B.Com (Hons. in Finance) from St. Xavier’s College, Kolkata. She secured All India Rank 1 in CT7 – Business Economics, reflecting her strong academic foundation in actuarial science, finance and analytics.

With over 10 years of teaching experience, she has taught and mentored 5,000+ students across Actuarial Science, Data Analytics and Finance. At Actuators Educational Institute, she teaches the Paper B components of CM subjects, along with CS2, CB2, CP2, CP3 and FRM, and also conducts training in Excel, VBA, SQL and R Programming. She has delivered workshops and academic sessions at institutions including SRCC, Lady Shri Ram College, St. Xavier’s College, Mithibai College, IIM Indore and IBS Hyderabad, combining deep technical expertise with a practical, structured and exam-focused teaching approach.

PLAYLIST

Demo Class Videos


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