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Hi, Only the IFoA can provide a definitive answer to this. But for what its worth, in my opinion if it is just 1 mistake in a question number...

That sounds like a sensible rule of thumb in the absence of any further wording or information that might suggest the focus should be on consumers...

Hi Greg, For Question 21, an inflationary gap occurs when aggregate expenditure exceeds national income (or injections exceed withdrawals) at the...

Hi Hashini, This means a bond is issued at time 3 for $95 and redeemed at time 4 for $100. From this information, we can work out the 1-year...

Hi Greg, The bit in bold is needed because the payments are made monthly but the increase needs to be applied only once per year. Using your...

Hi Jack, For part (iii), you first need to work out the total cost when four units of labour are employed. So this will be 4 multiplied by the...

Hi BenNiu, We need to break the analysis down into two: (1) the impact of the change in money supply on the interest rate, and then (2) the...

Hi Lauren, If you're happy with the logic that the marginal utility from the last unit of Good Y needs to be twice the marginal utility from the...

Hi Tina, It's great that you've already started thinking about the 2024 exams and it's a good idea to make a plan of how you will study the...

Hi Molly, This looks correct. For 2), your first line is based on death benefits being paid at the end of the year of death (as you mention),...

Hi Molly, With these recursive reserves, we are looking at periods of 1 year each time. And for each 1 year of a policy, there is only 1 premium...

Hi Molly, The claims acceleration approximation is a way of approximating the answer based on the assumption that deaths occur on average half...

Hi Molly, It is needed here for the DMT cashflows as we are comparing assets and liabilities, and so we need to be consistent. Ie if we are...

Hi Sudhan, For the pension benefits, the payments that would be made at any future time t are: (1) nothing if t<10 (2) 5,000 pa...

No worries. Does your query relate to the calculation for the DMT of bond A, and in particular why we have 'A/90.288' in the numerator? If so,...

Hi Molly, just to clarify, is it Question 9 part (ii) in the end of chapter questions that you are looking at? (I can't see a part b for Q9)....

Hi Chun, There are often several possible approaches, and the solutions use a variety of these to demonstrate the alternatives. Some solutions,...

Hi Gabriela, We understand that some students have asked similar questions to the IFoA and then received positive responses. However, as it is...

Hi Cam, The wording 'endowment assurance' tells us that there is both a death benefit and survival benefit. Death is mentioned in the 2nd...

Hi Danny, We could use the approach: whole life joint life annuity minus discounted whole life joint life annuity, ie adue:xy:<n> = adue:xy –...

Hi Chun, You will likely receive full marks for the accurate answer (ie using actual numbers in excel as you have done above) or for using a...

Hi Danny, A death strain is the strain (ie cost) to an insurance company of a death occurring. It is the amount of money (on top of the reserve...

Hi Molly, your approach doesn't work because (a) you've used the wrong number of months per quarter, and (b) you've ignored interest between the...

Hi Daniel, the posts in this thread are from 2-3 years ago and so relate to older exam papers rather than April 2023. Thanks, Richie

Hi Sudhan, To calculate the actual payments of the bond, we use inflation from 3 months before the issue date to 3 months before the payment....

Hi Cam, 7.2 There are two alternative approaches to 7.2, and the rate required will differ depending on the approach we go with. The approach...

Hi, It looks like in Paper B Sept 2021 Q4(ii), the bid-offer spread is treated separately (ie it has it's own column). Whereas in Assignment...

Hi Nanaba, Here is the video mentioned in my previous post. https://www.youtube.com/watch?v=QhJayccs2Ck Richie

On the link you provide, the wording ‘guaranteed income bond’ is being used to describe what is basically a fixed rate savings account. The...

Hi Nanaba, The CMP currently being sold reflects the style of the April 2023 exam (ie the old style). It also reflects the new version of the...

Hi Bill, Addressing your points in turn: Yes, that’s correct: although more likely a portfolio of zero-coupon bonds (rather than just one such...

Hi Bill, It’s a bit of both (subjectivity and actuarial judgement), but they are not definitive numbers and other answers would have been...

Hi Rishabh, Thanks for confirming. Comparing the GDP figure from one year to another can be misleading because prices might have changed. To...

Hi Rishabh, please can you advise which exam paper (year, month and question) this question has been taken from. Kind regards, Richie

Hi Rajat, There is a response to a similar question posted earlier this year that you might find useful. I've provided the link below....

Hi Jamie, There are two things going on here, the increase in government spending and the increase in the money supply, and two models to...

Hi Akansha, please can you advise where you have found this question, ie which exam paper has it come from? Thanks, Richie

Hi Yuli, I assume you're referring to Question 8.2. As the question doesn't mention the specifics of the bond, it is possible that the bond is...

Hi Bethany, A reply wasn't provided at the time given the short time between your question being posted and the exam. For future reference,...

Q1) Risk budgeting could be applied in all types of investment scenarios, eg the assets of a pension scheme, life insurance company or any type of...

Hi Eleanor, I think the examiners have used the words planned consumption and planned investment as the figures provided are not actual figures....

Hi there, Rather than waiting until someone is available to provide you with a response to your questions, it might be worth you having a look at...

Hi Eleanor, Good question - the inconsistency comes down to a discrete vs continuous approach. Differentiating total revenue gives us a...

It is important to distinguish between those investors considering purchasing a bond and those investors who already hold bonds, because a change...

Hi there, Both of these questions are asking about the risk characteristics of the investments. SYSTEM T is about the more general...

Hi there, taking your questions in turn: Question 1 Yes, the risk premium is part of the ‘required return’ equation as you state: the higher the...

Hi Pxliang, The definition of a loss leader is given on page 11 of module 9. Loss leaders are offered at low prices in the hope of attracting...

Hi Imy, For part f), total revenue = price * quantity at the profit maximising output level. We have both of these figures from parts b) and...

Hi Pxliang, Moral hazard is defined and explained in section 5.1 of the textbook. Kind regards, Richie

Hi Pxliang, There is a section called 'Diminishing marginal utility of income and attitudes towards risk taking' on page 131 of the textbook....

Hi Pxliang, This question requires use of the average method to calculate cross-price elasticity of demand (CPED). The general formula is:...

Hi Rachael, In practice, those are examples of policies that the government could use to try and achieve greater competition. Given the...

Hi Rachael, I would agree that the use of black boxes (to monitor the policyholders driving) is an example of something a car insurer could do to...

Hi Leigh, No, there is no ASET for 2018 papers as there was no capacity within ActEd to produce them at the time (due to the significant syllabus...

Hi Angelina, Before attempting this question, I would recommend checking that you can follow the worked example on page 752 of the textbook...

Hi Rachael, Structural barriers to entry are those that exist naturally due to the characteristics of an industry. This means they would include...

Hi Rachael, No worries. And by the way, my apologies for misspelling your name in previous posts! I think your suggested point seems sensible....

Hi Rachael, Please can you confirm the question number & date? Question 33 of September 2017 is asking why two mobile phone companies might...

Hi Rachel, This was a very difficult question, and before you get too bogged down in the detail, it is worth pointing out that the answer which...

Hi Rachel, For d), I agree that speculation that the exchange rate will fall will also deter potential investors from purchasing sterling, hence...

Hi Rachel, Good question - it is difficult to understand exactly what is being tested with some of these longer answer questions. For a question...

Hi Anu, The CMP guides you through the relevant sections of the textbook whilst providing some additional guidance and practice questions along...

Hi Imy, We are currently in the process of working on the Online Classroom product for CB2. We can’t say exactly when it will be ready – there...