Hi Lindsay
I have a different view. When management changes its assets mix(having both the mentioned effects) shouldn't it change the company views on future in terms of returns and volatility due to change in assets position/structure during the analysis period?
I also have question related to mismatching profit.
To be honest, I couldnt understand why mismatching profit(also can you explain it with an numerical example) is getting considered when we allowed for actual investment return variance(difference in asset value and liability value post investment return) and also a change in surplus position due to change in asset yield under 'economic chnage' bucket.? I mean any surplus due to change in asset yield/investment return assumption shouldn't be due to mismatching between asset n liability(not adequately immunized against change in yield) ? And can you also help me understand the last line of this 'Mismatching profit' paragraph-'impact of the yields on the actual backing assets rather than swap rates used for the BEL'? What impact it being talked here
Thanks
Last edited by a moderator: Feb 21, 2018