SDST2901 Probability and statistics: foundations of actuarial science (6 credits) Academic Year 2025
Offering Department SCDS (Department of Statistics and Actuarial Science) Quota ---
Course Co-ordinator Prof S M S Lee, SCDS (Department of Statistics and Actuarial Science) < smslee@hku.hk >
Teachers Involved (Prof S M S Lee,Statistics & Actuarial Science)
Course Objectives The purpose of this course is to develop knowledge of the fundamental tools in probability and statistics for quantitatively assessing risk. Applications of these tools to actuarial science problems will be emphasized. Students will have a thorough command of probability topics and the supporting calculations.
Course Contents & Topics 1. General probability
- Basic elements of probability in set notation
- Mutually exclusive events
- Addition and multiplication rules
- Independence of events
- Combinatorial probability
- Conditional probability and expectations
- Bayes theorem / Law of total probability
- Random variables
2. Univariate probability distributions (including binomial, negative binomial, geometric, hypergeometric, Poisson, uniform, exponential, chi-square, beta, Pareto, lognormal, gamma, Weibull and normal) and bivariate normal distribution
- Probability functions and probability density functions
- Cumulative distribution functions
- Mode, median, percentiles and moments
- Variance and measures of dispersion
- Central limit theorem
3. Sampling distributions and introduction of estimation
Course Learning Outcomes
On successful completion of this course, students should be able to:

CLO 1 understand the mathematical theory underlying the modern practice of statistics
CLO 2 develop skills in probabilistic analysis for problems involving randomness
CLO 3 apply techniques in probability and statistics to solve actuarial science problems
Pre-requisites
(and Co-requisites and
Impermissible combinations)		 Pass in MATH1821 [for BSc(ActuarSc) students] or already enrolled in this course, or
Pass in MATH1013 or already enrolled in this course [for students outside the BSc(ActuarSc) programme]; and
Not for students who have passed or enrolled in any of these courses: SDST1601, SDST1602, SDST1603, SDST2601
Only for students admitted in 2025 and thereafter.
Course Status with Related Major/Minor/Professional Core 2025 BSc in Actuarial Science ( Core/Compulsory )
Course to PLO Mapping 2025 BSc in Actuarial Science < PLO 1,3,5 >
Offer in 2025 - 2026 Y        2nd sem    Examination May     
Offer in 2026 - 2027 Y
Course Grade A+ to F
Grade Descriptors
A Demonstrate thorough mastery at an advanced level of extensive knowledge and skills required for attaining all the course learning outcomes. Show strong analytical and critical abilities and logical thinking, with evidence of original thought, and ability to apply knowledge to a wide range of complex, familiar and unfamiliar situations. Apply highly effective organizational and presentational skills.
B Demonstrate substantial command of a broad range of knowledge and skills required for attaining at least most of the course learning outcomes. Show evidence of analytical and critical abilities and logical thinking, and ability to apply knowledge to familiar and some unfamiliar situations. Apply effective organizational and presentational skills.
C Demonstrate general but incomplete command of knowledge and skills required for attaining most of the course learning outcomes. Show evidence of some analytical and critical abilities and logical thinking, and ability to apply knowledge to most familiar situations. Apply moderately effective organizational and presentational skills.
D Demonstrate partial but limited command of knowledge and skills required for attaining some of the course learning outcomes. Show evidence of some coherent and logical thinking, but with limited analytical and critical abilities. Show limited ability to apply knowledge to solve problems. Apply limited or barely effective organizational and presentational skills.
Fail Demonstrate little or no evidence of command of knowledge and skills required for attaining the course learning outcomes. Lack of analytical and critical abilities, logical and coherent thinking. Show very little or no ability to apply knowledge to solve problems. Organization and presentational skills are minimally effective or ineffective.
Communication-intensive Course N
Course Type Lecture-based course
Course Teaching
& Learning Activities
Activities Details No. of Hours
Lectures 36.0
Tutorials tutorials/example classes 12.0
Reading / Self study 100.0
Assessment Methods
and Weighting
Methods Details Weighting in final
course grade (%)		 Assessment Methods
to CLO Mapping
Assignments Coursework (assignments, tutorials, and a class test) 25.0 1,2,3
Examination One 3-hour written examination 75.0 1,2,3
Required/recommended reading
and online materials		 Feller, W. (1968). An Introduction to Probability Theory and Its Applications. Wiley, New York.
Hassett, M. and Stewart, D. (2006). Probability for Risk Management (2nd Edition). ACTEX Publication: Winsted.
Hogg, R.V. and Tanis, E.A. (2009). Probability and Statistical Inference (8th Edition). Prentice Hall: Upper Saddle River.
Ross, S.M. (2005). A First Course in Probability (7th Edition). Prentice Hall: Upper Saddle River.
Wackerly, D., Mendenhall, R. and Scheaffer, R. (2008). Mathematical Statistics with Applications. (7th Edition). Thomson Brooks/Cole: California.
Course Website http://moodle.hku.hk
Additional Course Information NIL