Regarding to the scenario "Increase in yields", I feel that solutions under both methods are interchangeable, I can't see which points we should distinguish both methods in the solution. Could anyone help please? Thanks a lot in advance!
I think there's overlap - they are both with-profits after all. But things can happen more slowly with A to B as we smooth payouts - and take more of a long term view with regard to the regular bonuses. So even if we make an immediate gain then we're likely to increase RB rates slowly as opposed to just pay a higher dividend because the formula produces a higher number.