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Cost of options/guarantees

Discussion in 'SP2' started by Bharti Singla, Aug 27, 2021.

  1. Bharti Singla

    Bharti Singla Senior Member

    Hi tutors,

    Could you please confirm do we have below concepts in current SP2 curriculum or they are removed? Related to calculating the cost of options.
    • North America Option
    • Conventional method
     
    Bharti Singla, Aug 27, 2021
    #1
  2. Mark Willder

    Mark Willder ActEd Tutor Staff Member

    Hi Bharti

    Explicit mention of these two methods has been removed from the Core Reading. So you wouldn't be expected to explain how these approaches work.

    However, the conventional method simply assumes that everyone takes the option and has ultimate mortality. The North American method assumes some percentage take the option and assumes a different mortality for the takers and non-takers. These broad concepts are still in the Core Reading even if the names are not.

    Best wishes

    Mark
     
    Mark Willder, Aug 27, 2021
    #2
  3. Bharti Singla

    Bharti Singla Senior Member

    Thanks Mark, that is really helpful!
     
    Bharti Singla, Aug 27, 2021
    #3

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