• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

general doubts

S

Sagar_sagar

Member
Q1. what is the use of bid price on offer basis and
offer price on bed basis ?

Q2. Why for with-profit business present value of profit is calculated as PV of shareholder transfer under EV calculation. why not full business profit is considered ?
 
Q1: bid price on offer basis = to pay out claims (p/hs cashing in their units) if the company is pricing under an offer basis (even if there is a net inflow of cash, there will still be some claims that need to be paid out)
offer price on bid basis = to use to purchase units with premiums coming in, if the company is pricing under a bid basis (even if there is a net outflow of cash, some p/hs are likely to still be paying premiums in)

Q2: EV = value of shareholders' interest in the company. Thus it includes PV future shareholder profits = PV future shareholder transfers.
[Wouldn't count the full business profit as a lot of this would go to the policyholders, not shareholders.]
 
Back
Top