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April 2022

R

rlsrachaellouisesmith

Ton up Member
Hi

In Q5)(iii) would it be acceptable to assume cashflows occur at the end of each year?
I did not use annuity factors but instead wrote out the cashflows for each year 1-24, in a table including calculations, and called these Ct. I then gave the expression sum (i = 1-24):Ct*(1+i)^-t = 0 and said we would need to solve for i.
Would this be acceptable to score full marks?

Thank you
 
For exams set and marked by the profession, we (ActEd) would not be able to say what did or did not score marks, other than what is on the marking schedule. Usually in tutorials, for cashflow timings, I say that firstly you should read the question really carefully for clues. If there are none, and the period is a year, assume the middle of the year rather than the end or beginning. Solving annuities in an excel table would probably be fine so long as you complied with the information on the IFoA website about the use of excel, and you copied the key formulae into your word doc.
 
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