Good afternoon, I have completed this paper today and just had a few questions: 1) I included a table for the minimum capital requirement ratio rather than a graph as I thought it better displayed the change in the ratio as the changes were so small and I did not want to start the y axis on the graph with a non-zero figure. Would the table have been acceptable for marks or would it be necessary to produce a chart? 2) I included the calculation of the stressed mortality and morbidity rates in the paper but not in the Purpose statement which is where it was included in the model solution. Was it ok for this to be included anywhere? 3) The paper did not ask for a table of values to be included showing the MCR and ratio for each scenario, nor did it ask for a table of values showing the base and stressed expected net present value under each product type. Why was this included? Could these figures have been included as approximate values in the text rather than in a table? 4) What is meant by the next steps point 'Model mortality/incidence rates more for risk'? Are there other examples other than smoker status, so for example we could say mortality for annuitants and TA could be modelled by a different table? Thank you, Rachael
Hi Rachael 1. I think the graph you are referring to is the one you are asked to produce in Q2 (iv). So, as it was part of the question I would expect to see it included in the summary (and there will be marks for this). 2. Yes, as long as you gave enough information in the purpose section so your manager knew what the project was about, I think it would be fine to include the exact details elsewhere. 3. Just including the chart showing the MCR would be fine. The table you refer to of expected NPVs was included in the base model, so again, we should expect to have to discuss these results within the summary report. As we were asked to update this (for the chart) again it makes sense to include it. If you didn't include the table but discussed the key results within your commentary that would have been fine. 4. Yes, your example about modelling annuitant and term assurance mortality separately is fine. Smoker status is the other big differentiator that is typically used, but we could suggest occupation and location as other factors to investigate. Sarah
Hi Sarah Thank you. So this means if we are asked for a chart then it is looking for some kind of graph, not a table. Thanks again, Rachael
