H
herewegoagain
Member
Hi
I am a little confused with a couple of numeric questions, and was wondering if anyone can help me out with this.
403-2 September 2002, question 1 part (ii)
This question requires setting up of the technical account:
1. The question states that the dividend is calculated such that the solvency margin is kept constant. I've now had many unsuccessful attempts at reconciling the dividend payments, but all failed misreably. Does anyone know how the dividend payments are calculated?
2. Also relating to the same part, when the solution calculates the increase in free assets and technical funds, it assumes they increase by 10%. How is this, if the question states that the investment returns earn 5% interest?
403-2 April 2004, question 2 part (iv)
I am not sure how the rate change factor of 1.059 is being calculated:
1. Firstly, the arithmetic in the solution does not come to 1.059 - I calculate it as 1.027.
2. Secondly, I don't understand why when calculating the rate change the solution says "...divided by (1/2 + 1.05*3/8 + 1.05*1.06*1/8). I can understand the numerator of the rate change, which I think is the 2004 rate, but what exactly is this denominator calculating?
Thanks
I am a little confused with a couple of numeric questions, and was wondering if anyone can help me out with this.
403-2 September 2002, question 1 part (ii)
This question requires setting up of the technical account:
1. The question states that the dividend is calculated such that the solvency margin is kept constant. I've now had many unsuccessful attempts at reconciling the dividend payments, but all failed misreably. Does anyone know how the dividend payments are calculated?
2. Also relating to the same part, when the solution calculates the increase in free assets and technical funds, it assumes they increase by 10%. How is this, if the question states that the investment returns earn 5% interest?
403-2 April 2004, question 2 part (iv)
I am not sure how the rate change factor of 1.059 is being calculated:
1. Firstly, the arithmetic in the solution does not come to 1.059 - I calculate it as 1.027.
2. Secondly, I don't understand why when calculating the rate change the solution says "...divided by (1/2 + 1.05*3/8 + 1.05*1.06*1/8). I can understand the numerator of the rate change, which I think is the 2004 rate, but what exactly is this denominator calculating?
Thanks