2017 September Paper 2

Discussion in 'CP2' started by Darragh Kelly, Mar 28, 2023.

  1. Darragh Kelly

    Darragh Kelly Ton up Member

    Hi,

    I have a few questions regarding the 2017 September Paper 2:

    1. For the 'Eat Healthily' campaign I don't follow the IFoA's calculation for calculation the adjusted mortaility rate in column D & E in the 'Eat Healthily' tab. They take the product of all previous 1-Mort Improvement (in column C), and then multiply it by the base mortality rate for the age in question. Why is it done like this? I did not see an instruction in the exam paper to complete the calculation like this. I just multiplied the base mortaility by 1-mort Improvement in column C (did not take the product all all previous 1-mort imrpovement).

    2. In the summary doc (page 7 of summary doc) could someone please provide a bit more insight into the sentence highlighted red:

    The impact of the mortality improvements is slightly greater for the Get Active campaign for 65 year olds but the Eat Healthily campaign is slightly greater for 75 year olds. This is because the 65 years olds are more impacted by the long term mortality improvement rate as they are younger and the Get Active campaign has the better long term rate

    Is this just saying that the 'Get Active' improvement factor of 2% hits more of the higher mortaility rates then the 'Eat Healthily' improvement factor eg from age 85 onwards the mortaility rates grow rapidly (expontially) and the 2% improvement hits these, whereas in the 'Eat Healthily' 1% is only hitting these rates?

    And then the reverse situation for 75 year olds - the improvement factor for 'Eat Healthily' now hits higher mortaility rates (due to the 10 year offset in age), so is more effective then the 'Get Active' improvement rate even though it reduces from 4-1%?

    3. In the summary doc (page 7 of summary doc) could someone please provide a bit more insight into the sentence highlighted red:

    We can see that the annuity-due factors increase under both health campaign scenarios because if citizens live longer the present value of an annuity for the rest of their lives is higher. But comparing to the increase in the expectations of lives above the relative impact is smaller because of the effect of discounting of the future payments

    Many thanks,

    Darragh
     
    Last edited: Mar 28, 2023
    Darragh Kelly, Mar 28, 2023
    #1
  2. Sarah Byrne

    Sarah Byrne ActEd Tutor Staff Member

    Hi Darragh

    1. This has been to be consistent with how the mortality improvement was applied in the Get Active scenario. If you look at columns C and D of that worksheet, the mortality improvement is applied for the duration since age 65. So, under the Eat Healthily scenario, the mortality improvement since age 65 is used, but as it varies, we need to calculate the adjustment needed. This makes sense, think about someone aged 70, they don't just benefit from the mortality improvement at age 70 but also benefitted in previous years.

    2. Yes, the fixed 2% improvement for the Get Active scenario leads to a larger increase in life expectancy for someone aged 65 as they have longer to benefit from this. The Eat Healthily scenario makes a larger impact for older lives, those aged 75 as they benefit more from the initial higher mortality improvement as they have less time to benefit from the long-term rate.

    3. If you took a percentage change for life expectancy and compared it to the % change in annuity rates, the life expectancy increases more as it isn't affected by discounting which will reduce the impact of changes. Eg the change in life expectancy for a 65year old female from the base to the Get Active scenario was an increase of 13.8%, the annuity rate only increased by 5.8%.

    As ever, remember that the themes in the comments are more important than the exact details, so don't get too caught up in these. Any scenario in your exam is likely to be very different, so it's important you have the skills to generate a range of sensible comments for any set of results rather than are able to reproduce the same exact comments here.

    Sarah
     
    Sarah Byrne, Mar 29, 2023
    #2
  3. ntickner

    ntickner Very Active Member

    Take comfort from the fact that at least about 40-50% of the candidates I saw did something similar. However, this paper isn't really about getting the details of the calculations right - it's about being able to present & write about your results in a coherent way. So while loads of people got the calculation wrong, many of them passed because they were able to explain why their results made sense, present them well, and come up with good next steps & conclusions.

    However - be aware that errors in the calculations may result in answers that are harder to write about. In this case, for instance, I vagely recall that the model answer's results moved in a way that led to loads of comments being possible, while the erroneous ones ended up being not so remarkable. This makes it harder to get marks for this area. So while you shouldn't stress too much about making mistakes, it's still very worthwhile putting in the effort to understand the question, and get it right.
     
    ntickner, Mar 31, 2023
    #3

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