R Programming for Actuarial Science

Introduction

1 Main Objectives of This Book

The overriding objective of this book is to help students of actuarial mathematics and related disciplines such as financial mathematics, develop programming skills which will enhance their understanding of actuarial, financial, and statistical concepts, enabling them to solve real-world problems encountered in these fields. Breaking this down further, the purposes of the book is two-fold:

1. To provide an introduction to the programming language, R. This is achieved using worked examples and undertaking exercises commonly seen in the fields of actuarial and financial mathematics.
2. Secondly, to improve the reader’s level of understanding of actuarial and financial topics by using these programming skills. We believe that most students can develop a deeper understanding of mathematical material by solving problems using a programming language. From our experience of teaching actuarial mathematics and statistics, students often confirm that their understanding of a topic has vastly improved following the completion of a computer-based exercise or project.

   A similar effect is noted in students who opt to take a year out from their studies to work in the financial industry, often applying extensive programming skills to solve real-world problems. Such students invariably notice a similar level of improvement in their understanding of concepts. It is hoped, to some extent, that this learning experience can be mirrored throughout this book. ...