ACET (Institute of Actuaries of India Exams) key terms

A comparison of two quantities by division, showing how many times one value contains another. Often written with a colon, as in 3:4, and used to scale recipes, maps, or mixtures.

An equation stating that two ratios are equal, such as 2/5 = 8/20. Solving proportions by cross-multiplication lets you find an unknown value in scaling and mixture problems.

A number expressed as a fraction of 100, written with a percent sign. Useful for discounts, interest, and data reporting, and converted to decimals by dividing by 100.

The difference between a new value and an original value, divided by the original value and multiplied by 100. Distinguishes growth from decline and avoids confusing the base with the result.

The sum of a set of values divided by how many values there are. Sensitive to extreme values, so it can mislead when data are skewed; compare with median and mode.

A mean in which each value contributes according to its assigned weight rather than equally. Used for grade point averages, index numbers, and combining group results of different sizes.

The middle value of an ordered data set, or the mean of the two middle values when the count is even. Resistant to outliers, making it useful for income and house-price data.

The value that appears most frequently in a data set. A set may have no mode or several modes; the mode is the only measure of central tendency usable for categorical data.

The difference between the largest and smallest values in a data set. Simple to compute but based on only two observations, so it ignores how the rest of the data are spread.

A measure of how far values typically lie from the mean, found by averaging squared deviations and taking the square root. Larger values indicate more spread or variability.

The average of the squared differences between each value and the mean. Its square root is the standard deviation, and it underlies many statistical tests and confidence intervals.

A data point that lies unusually far from the rest of the observations. Outliers can distort the mean and standard deviation and should be checked for error or genuine cause.

A symmetric, bell-shaped probability distribution described by its mean and standard deviation. About 68 percent of values fall within one standard deviation of the mean and 95 percent within two.

A number between 0 and 1 expressing how likely an event is, calculated as favourable outcomes divided by total equally likely outcomes. Forms the basis for risk and sampling questions.

Two events where the occurrence of one does not change the probability of the other. For such events, the probability that both happen is the product of their individual probabilities.

Events that cannot occur at the same time, such as rolling an odd and an even number on one die. Their combined probability is the sum of their separate probabilities.

A table or chart showing how often each value or class interval occurs in a data set. Grouped distributions use class intervals and help reveal shape, peaks, and skew.

A bar chart for numerical data in which bars touch and each bar's area represents the frequency of a class interval. Unlike a bar chart, the horizontal axis is a continuous scale.

A chart using separated bars whose heights show values for distinct categories. Gaps between bars signal categorical data, and the vertical axis should normally start at zero.

A circle divided into sectors whose angles are proportional to each category's share of a total. Best for showing parts of a whole with few categories, not for precise comparison.

A chart plotting data points connected by lines, usually to show change over time. The slope between points indicates the rate of change, and axes must be read carefully.

The general direction in which data move over a period, such as upward, downward, or flat. Distinguishing a trend from seasonal or random fluctuation is essential in data interpretation.

A statistical measure of how closely two variables move together, ranging from -1 to +1. Correlation does not establish that one variable causes the other.

A graph plotting one point per observation on two axes to show the relationship between two numerical variables. Clusters and patterns suggest correlation or possible outliers.

The original or reference amount against which a change or comparison is measured. Confusing the base with the new value is a common source of percentage errors in data questions.

A statement offered as evidence or support within an argument. Identifying premises separately from the conclusion is the first step in evaluating whether reasoning is sound.

The claim an argument tries to establish, usually signalled by words such as therefore, hence, or so. It is what the premises are intended to support.

An unstated belief the argument requires in order to work. Finding the necessary assumption lets you judge whether the reasoning holds or whether a gap weakens it.

A conclusion drawn from given information rather than stated directly. Valid inference must follow necessarily from the evidence, not merely seem plausible.

A form of deductive reasoning using two or more premises to reach a conclusion, as in all A are B and all B are C, so all A are C. Often tested with Venn diagrams.

Overlapping circles representing sets, used to show shared and distinct members. Helpful for solving syllogisms and questions about groups with two or three attributes.

A collection of distinct objects or elements, often written in braces. Operations such as union and intersection describe how sets combine and overlap.

A method for solving an equation of two fractions by multiplying each numerator by the opposite denominator. It converts a proportion into a simple linear equation.

A word with a meaning close to another word in the same context. Exam questions often ask you to pick the closest match, so register and nuance matter as much as basic meaning.

A word opposite in meaning to another, such as scarce and abundant. Antonym questions test precision, since several options may be loosely opposite but only one fits exactly.

Information in surrounding words or sentences that helps you work out an unfamiliar word's meaning. Examples, contrasts, and definitions within the passage are common types.

A meaning the passage implies without stating directly, drawn from evidence in the text. Correct answers stay close to the passage rather than relying on outside knowledge.

The central point a paragraph or passage develops, usually broader than any single detail. Identifying it helps you reject options that are too narrow, too broad, or off topic.

A sentence, often first in a paragraph, that states the paragraph's main point. The remaining sentences should support or illustrate it, giving the paragraph unity.

The quality of writing in which ideas are logically ordered and connected so readers can follow them easily. Linking words and consistent pronouns are common tools for achieving it.

The way sentences are tied together through pronouns, repeated words, and connectors such as however or therefore. Strong cohesion makes a text read as a single unit.

A word or phrase such as moreover, nevertheless, or consequently that signals the relationship between ideas. Choosing the right one depends on whether ideas add, contrast, or cause.

The rule that a verb must match its subject in number and person, as in the list is versus the lists are. Interrupting phrases between subject and verb often cause errors.

A word or phrase that describes or limits another word. A misplaced or dangling modifier attaches to the wrong word and can make a sentence confusing or absurd.

Using the same grammatical form for items in a list or comparison, as in reading, writing, and speaking. It improves clarity and rhythm and is frequently tested in error-correction items.