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Q2(iii) a 14 mark question on balance sheet impact of an equity fall. The solutions are not in line with SII, so I wanted to check my...

In the course notes a few different methods for taxing benefits from life insurance policies are mentioned. One was capital gains tax rate might...

Hi In this chapter under the Unit linked section there is no mention of persistency risk as a key risk to insurers - given early withdrawals do...

In this chapter temporary equivalence is explained as equivalence which is granted until the earlier of 31/12/2020 or a date set by the regulator....

Hi In this chapter it says that liquidity risk is the risk of short term cashflow mismatches, and that longer term cashflow mismatches are...

Hi I just wanted to confirm my understanding of dynamic lapses. A lapse is the risk of a policy being cancelled/terminated due to non...

Hi, On page 4 of this chapter it says that a special reversionary bonus might be declared to maintain guarantees on policies where uniform...

On page 7 of the notes it states that smoothing profits/losses can arise because of smoothing. We expect smoothing profits/losses to be neutral...

In Chapter 18 AS philosophies are mentioned and in Chapter 21 U/W philosophies are mentioned. Are these just documents that set out the principles...

In Chapter 10 there is a very small section on the importance of data quality under SII. The second reason it is deemed crucial is that it allows:...

Hi, On page 15 of this chapter it talks about G-SIIs being subject to enhanced supervision, including: effective separation of non-traditional...

Hi In this chapter over pages 12 to 13, it explains how available capital will be assessed. My understanding is that a market consistent...

Hi For GMM: In the notes it states that the SII BEL and IFRS BEL could be different, page 13 Chapter 16. I understand they could be different...

Hi I would like to check my understanding of the impact of NB on surplus arising. In a simplified approach to surplus Assets - Liabilities (BEL...

Hi, In the target market section it says that one factor driving life insurance demand is the number of viable customers. It says in particular...

Hi I have read that the regulator may impose reorganisation measures on an insurer that may imminently breach minimum solvency capital...

Hi I am trying to understand the effect on UL business surrender values if a Life insurer was taxed on I - E basis and then moves to being taxed...

Good morning On page 6 of this chapter the 11th bullet in the General embedded value principles states: The principles surrounding how results...

Hi In questions where we are asked to calculate the return over entire period, sometimes the result is calculated by - Multiplying...

Hi In the notes it states on page 41 of Chapter 5 that in some, more complex, structured products, the amount invested in the zero-coupon debt...

Hi In Q7(i) the solution states that the proposed tax would reduce the avoidance of tax, why is this? Thank you

Hi In Q3(ii)(b) it states that S&P 500 consists of investible shares, therefore is suited to portfolio benchmarking. The DJIA also contains...

Hi In Chapter 6 it states on page 4: this will include activity to stabilise rates (when cashflows between the government and private sectors...

Hi In Chapter 22 on page 7 of the notes it says: if the expected return indicated by the multifactor model is lower than that indicated by the...

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...

Hi In question X4.3(ii) we are asked to calculate another risk adjusted measure, and the Treynor is calculated. However, I did not think that this...

Hi Q7)(i) Can you confirm that the sector selection on cash in year 2 is actually -0.53% not -0.47%? Also in the revision booklet solutions it...

Hi Q2)iii) why is basis risk increased if positions are rolled indefinitely? Basis risk I thought had the biggest impact if need to close out...

Hi In the solutions for Q1(i), one of the advantages stated is that investment risk can be reduced. Is this because if we use cashflow matching...

Hi In Q2 in the mark scheme it states that the degree to which an active/passive approach may be successful will depend on the transparency of...

Hi Q2) how does avoiding short term measures and any subjective measures reduce costs associated with performance measurement? short term...

Hi I understand the calculation of VaR in question X6.5(ii), however in Sept 2017 Q6 a VaR is calculated as well and no expected return is given....

Hi, The first point on the ASET mark scheme for Q6(i)(b) states. By using debt can gear up the returns that the US company produces... does...

Hi In question 1 of this paper it asks about individual financial planning. The section in the notes on financial planning is very small and...

Hi, 1) Sept 2014 - Q5(i) could we use a table to show our response? 2) Sept 2014 - Q7 why the use of compare and contrast as command verbs in...

Hi, 1) Assignment X5 - Q1 (ii) for each method the solution explains the reason for the higher return and the risk associated and generally...

Hi In question 6 on this paper the solutions say, HF use a cash benchmark for performance analysis - what is meant by a cash benchmark? Thank...

Hi In Q5 on this paper the responses under (d) include mention of front running, I have not noticed this in the notes anywhere, would we be...

Hi, First exam paper attempt, and a few questions, which I am hopeful you are able to help with. Q1 o could a possible deviation be the size...

Hi Are there any questions in 2012-2018 papers that are no longer part of the syllabus and should therefore be ignored? Thank you, Rachael

Good morning, In the solutions to this question it states that noncash elements in the projected accounts should be allowed for, fiving the...

Hi I wonder if you can explain the policy loans that are mentioned in question 7 on assignment 6. I don't really understand the mechanics of how...

Hi In (ii) of this question I wondered why in particular we would want to invest in liquid bonds with term 10 years in the non-unit reserve. I...

Hi, In the core reading it says that the basic features of a generic cashflow projection model are described in CP1, are these examinable in SP2?...

Hi On page 9 of the chapter it states that regulators may specify that negative non unit reserves can only be held, if 3 conditions hold. The...

Hi 1) When considering the risk of distributors acting against the insurer the example given for taking advantage of a loop hole in product...

Hi In chapter 28 where we talk about developing an appropriate investment strategy the notes talk about a full office model being used. My...

Hi In the chapter on policy data the section on Reconciliation checks says that for unitised business the 'benefits available' can be calculated....

Hi Why would Original terms reinsurance be generally used if the reinsurer was providing technical assistance? I understand why a high quota...

Hi On some of the papers in the new ASET there is an overview of the paper that includes the pass rate and pass mark for this sitting, however it...

Hi On page 16 of the Acted notes in Ch 6, the price of a unit is discussed. - Unit price remains constant: addition of units, where the addition...

Good morning Are there any questions in the exam papers in this period that are no longer relevant to the course, other than those mentioned in...

Good morning, In the tutorial handout Ex 1 question 2 the reasons in the solution appear to be the answers for a WoL assurance with no specific...

Good afternoon, Another query on how to generate sufficient ideas for a question on the X2 assignment. I am struggling to think about how to...

Good morning, I am struggling to identify a way to structure my answer to this question. Because of the reference to 3 distinct sources of error,...

Hi We may be asked about key features of a policy/contract from a policyholder's perspective. Other than the benefits, premiums, charges and risks...

Hi I am looking at the chi-squared test completed by a colleague and I am not sure why we do not need to check that the total expected frequency...

Hi A basic question but would best practice be to not use IFERROR function but instead use IF(CoG=0,0,AVERAGEIFS formula). This is on the Data...

Hi I have just completed this paper. I have a few questions: 1) Instead of using i(p) to calculate the annuity factor I used i(12)/12 assuming...

Good morning I just wondered if you can give any guidance on how to plot charts of cashflows. - If there are just a few cashflows to show then a...

Good morning, I have been through this paper and have one question. In a previous paper and model solution the use of GOALSEEK was referenced in...

Good afternoon, I have just completed this paper and have a few questions: 1) Was it the fact that we were asked for data analysis that gave us a...

Good afternoon, I have completed this paper today and just had a few questions: 1) I included a table for the minimum capital requirement ratio...

Hi I have just completed this paper and I have a few general Paper 2 questions as well as specific questions to this paper. - Do we need to...

Hi I have just completed Paper 1 April 2019 and I accumulated a few questions: 1) When watching the online classroom it states that in the...

Good afternoon, I have just completed my first attempt at a Paper 2. General questions Is it normal to find the commentary on results and...

Good morning, In the data adjustments there was an N in the age bands, which should have been an S or a J. In the model solution it says this is...

Hi On page 29 of the online classroom handout under Parameters there are two points: Comment on any independence/dependencies in parameters...

Good morning In Chapter 7 of the notes on page 8 it states how we can enter mathematical formulae if we need to. I know it is unlikely that we...

Hi I just wondered if there is a pre-prepared excel document with the data from the background sheet in, or if we are expected to reproduce...

Good afternoon, Where can I find the marking schedule for the audit trail? I could only see the model solution in the online classroom and not...

Good afternoon, At time 11:21 on the video we are shown some row by row calculations for whether a member is a member at the start of each of...

Good morning Why might the infrastructure assets be unmarketable? Thank you

Good morning, In the mark scheme it states that overseas investment may decrease because of a weakening domestic currency. However, it can be...

Good morning I wonder why in this question the answer does not focus purely on active, structural and strategic risk but goes for a catch all...

Hi I wonder what in this question indicates we should be discussing potential levers on surplus rather than capital management techniques? Is it...

Hi I wonder if you can confirm my understanding. Do long term bond yields depend on future expectations of short term rates according to...

In this question it says why we might expect to portfolio A leading to higher returns. How do we know that this is asking us to explain why...

If we are asked to solve the SDE for Xt, does it matter if we solve for XT given Xt or do we have to use Xt given X0 as in the solutions to (ii)?...

In (iv) of the model solutions it states that the portfolios are inefficient. Is this because the return for ABC is lower than the portfolio,...

In this question solutions the following calculation is used. Var(R)=0.8*{E^2(R1)+Var(R1)}+0.2[E^2[R2]+Var[R2]}-E^2[R] Why are we able to do...

Hi Could it be argued that the investor is showing the availability heuristic: · The investor is also showing the availability heuristic....

The question asks us to solve to determine the adjustment coefficient. The solutions give both roots of the equation, even though one is negative...

Would it also be appropriate to say that using the inflation adjusted method if the total run off/development period is long. For example, even if...

Would it be acceptable to say that for the B-S model to hold we need trading to be continuous which it is not here since we are working in time...

This is in booklet 6 question 9. When we are calculating the hedging portfolio of shares and cash to hedge against the CEO's bonus I don't...

In (ii)(c) of the question we are asked to calculate vega of the option. Could we still be asked to do this? Thank you

Hi For the following questions I included the following biases/heuristics. The course has changed somewhat since 2010 so just wanted to check if I...

Hello, I calculated this using 0.05*-20%+0.05*0.95*(0.6^0.5-1)+0.05*0.95^2*(0.4^(1/3)-1)+0.95^3*i=0.1. Why does this not work? Thank you

Good morning, (i) Where will I find the definition of a complete market in the notes, I do not recall seeing this anywhere (iii) How do we know...

Hi, I am not sure why we are showing that EP[exp(-rt)Bt|Fs]=exp(-rs)Bs? We have been asked to show P is an equivalent martingale so I was looking...

Would the following score a mark for this? I think it probably would not as it does not reduce the risk, just gives the insurer a more accurate...

Hi, The model solutions state that B(t)=F(t)-E(t) and E(t) is like a call option. But as an alternative is it acceptable to describe the debt as...

Hi, If we have used q rather than p throughout the calculations, would we receive any marks? I made this mistake for both part (b) and (c)....

Hi, I just wondered if answers were accepted relative to the £10000 benchmark. I wrote for option 1: he maximum potential loss with confidence...

Hi, In (ii) of the question we are asked to prove put call parity using a self financing replication portfolio. We have also got a proof in...

Hi, In part (iv) of the question what is meant by the optimisation of consumption over time? This appears in this solution and on page 14 of...

Hi The assumptions in the solutions are different to those on the summary page in the Acted notes, they are more reflective of the actual...

Hi, In (ii) the answer has been given to the nearest 0.1%, in most of the implied volatility questions it states 'give to the nearest 1%'. If a...

How do we know this model is arbitrage free? And why does it only mean revert if mu<0 and then it reverts to 0?