Exam 7: Scenarios and probability distributions should not be mixed silently
A sensitivity asks how a result changes when an assumption changes. A stress is a specified adverse scenario. A predictive distribution assigns probabilities under a model. These outputs can complement one another, but they answer different questions.
Worked example or practice scenario
A +10% severity scenario raises a toy unpaid estimate from 5m to 5.5m. Without a probability model, the result is not “the 99th percentile.” Assigning a percentile label merely because a scenario seems severe invents statistical meaning.
Try this next
For each output in a practice problem, name its interpretation and assumptions. Use the current content outline and released resources to check required methods. Avoid importing an old topic list or using a scenario result as a stochastic confidence statement.
Reading sources
ActNet editorial guide · October 1, 2026 · Original illustrative examples.