Hi i am looking at CM1B Mock 2019 Q2 i) and am confused around the maturity cost in year 10 of the non-unit fund cashflow. As the question says "on maturity, the unit fund value, plus a bonus of 0,3, or 5% of the unit fund value..." I have calculated this as: (10,088.58 + (10,088.58 *0.03) ) * prob of survival however the solution for this is showing 10,088.58 *0.03* prob of survival and i'm not sure why. Thanks in advance!
The unit fund value comes from the unit fund, not the non-unit fund. The non-unit cashflow is only the bit that isn't covered by the unit fund, ie the bonus amount in this case.
