Hi Mystery128
Taking your points in order:
QB Question 4.9(i)
The reasonableness check multiplies together the capital return and the average dividend yield.
The capital return in the 1st 6 months is -2.6% and in the second six months is +20.3%.
So the capital return calculation is: (1-0.026) x 1.203 = 0.974 x 1.203.
Question 4.1(i)
An asset share calculations are mentioned in Subject CA1. Such a calculation is sometimes done when working out what surrender value should be paid to a with-profits policyholder.
The asset share calculation works out the accumulated value of a policy based on actual contributions paid in, investment returns actually earned and expenses incurred.
So if you were performing such a calculation you might use a fixed interest price index as part of your estimation of the investment returns actually earned over a period.
Question 3.10(v)
Your query has highlighted an issue with this question and so we are going to remove it from the Q&A bank. Please accept my apologies for the confusion and this inconvenience and thank you for raising the query. I'll ensure that the question's removal is also recorded in the ST5 Corrections document on our website.
Gresham
Last edited: May 13, 2013
