apr 2019 q1 iii

[dimitris13]

hi ,

maybe it s trivial but i dont understand the following
it says that claims are 60% higher. why 200/1.6=125 and not just say 200*60%=120?

similarly why for mat : 10000/0.9*1.05 and not 10000*0.9*1.05?

thanks

 

[Em Francis]

hi ,

maybe it s trivial but i dont understand the following
it says that claims are 60% higher. why 200/1.6=125 and not just say 200*60%=120?

similarly why for mat : 10000/0.9*1.05 and not 10000*0.9*1.05?

thanks

Hi
It is the way the question is written:
You are being asked for the movement in asset share and the question says that:
For deaths: the 200 is 60% higher than asset shares.
So asset share*1.6 =200.
Likewise, with the maturities: the 10,000 is based on smoothed asset share which is 90% of asset share (and is increased by 5%).
So asset share*0.9*1.05 = 10,582.
Hope this helps.
Thanks
Em