1. 

   r_v.s Member

   Why is the solution to 15.7
   Cb * ILF(1000000) / ILF(100000) and not as per the core reading equation
   Cb.( ILF(1000000) - IFL(100000))??

    

   r_v.s, Jan 7, 2015

   #1
2. 

   Darren Michaels ActEd Tutor Staff Member

   Hi there
   
   Cb.( ILF(1000000) - IFL(100000)) would calculate the expected loss cost to a layer from £100,000 to £1,000,000 (or £900,000 xs £100,000).
   
   The question asks you for the expected loss cost for a layer of £1,000,000 (ie £1,000,000 xs £0) which is why the answer is Cb * ILF(1000000) / ILF(100000).

    

   Darren Michaels, Jan 8, 2015

   #2

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