J
Jeff
Member
I have noticed that in profit testing there is the allowance for a risk discount rate and a profit margin. I would think that an NPV=0, at a risk discount rate (which is satisfactory for the product) would be sufficient to determine the correct premiums.
Why add a profit margin then; does not the risk discount rate cover the required profitability?
Thanks
Jeff
Why add a profit margin then; does not the risk discount rate cover the required profitability?
Thanks
Jeff