C
claire3000006
Member
p8 in chapter 5 of the acted notes gives the following recursive formula for asset share:
AS(t+1) = {(AS(t) + P - E(t))(1+i(t)) - Sq(x+t)}/(1-q(x+t))
where S = death benefit sum assured (and other symbols have their usual meanings)
in the solution to question 4 of the Sept 2008 paper it says:
"the treatment of the cost of the death benefit is inaccurate. it should not be based on the whole guaranteed minimum sum assured, but the excess of the actual death benefit over the asset share"
which is correct?
AS(t+1) = {(AS(t) + P - E(t))(1+i(t)) - Sq(x+t)}/(1-q(x+t))
where S = death benefit sum assured (and other symbols have their usual meanings)
in the solution to question 4 of the Sept 2008 paper it says:
"the treatment of the cost of the death benefit is inaccurate. it should not be based on the whole guaranteed minimum sum assured, but the excess of the actual death benefit over the asset share"
which is correct?