Hi For Q2 part v, we are asked to analyse the movement in the estate over the year. In this question, it is mentioned that estate is equals to Asset less Asset share less NTVOG. And, we are given that estate amount at the start and end of the year. However, in the solution given, investment income on NTVOG and the change in NTVOG are included as items contributed to the estate movement. Why do we still need to consider NTVOG in this case?
Estate = Assets - {Asset share + NTVOG} where NTVOG = time value of cost of guarantees & smoothing (net of charges taken to cover these costs) We are being asked to analyse the change in Estate, ie work out what has caused it to change in the way that it has. In this case, we are told that NTVOG has reduced considerably over the year, likely because guarantees are now less in-the-money? Lower NTVOG -> higher estate. So it is part of the analysis.
