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ILFs problem 15.7

R

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))??
 
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).
 
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