ahtohallan
Keen member
Hi
In section 2.3 under the sub heading of "setting and reviewing assumptions", the projection assumptions use a market consistent approach. It also says that the MC valuation approach could be risk neutral or best estimate.
In the Analysis of EV change section, the operating assumptions component of the AoC mentions that the economic assumption changes should include changes to the risk discount rate. Does this imply that the risk discount rate is always used for the projection basis?
If the risk neutral approach is used, does this mean that the AoC in the operating assumptions will include the change in risk free discount rates and any related risk margin?
Thanks in advance
In section 2.3 under the sub heading of "setting and reviewing assumptions", the projection assumptions use a market consistent approach. It also says that the MC valuation approach could be risk neutral or best estimate.
In the Analysis of EV change section, the operating assumptions component of the AoC mentions that the economic assumption changes should include changes to the risk discount rate. Does this imply that the risk discount rate is always used for the projection basis?
If the risk neutral approach is used, does this mean that the AoC in the operating assumptions will include the change in risk free discount rates and any related risk margin?
Thanks in advance