Sample Solution Sep 2019

[Michal Piatra]

Hi,

I was going through the sample solution after I attempted this paper and have a questions.
Answer to Question 2 iii) reads:
"A detailed derivation of the 4% Basic Rate has not been included as Sam did not ask to be educated as to how to calculate this rate"

However, in the email sent by sum he asking:
"Let me know which projection method we use now and how it currently works including how the two growth rates are set."
Based on this, I assumed that he would be interested in transparency of setting these rates.
So I included simple example with illustrative fund mix (just to funds with equal holdings and formula how to calculate the resulting basic rate).

Was this too much and unnecessary for him?

Also instead of using Annex 1 data to explain percentiles and simulations, I made up even more simplified data with only 5 scenarios and explained 50th percentile, assuming he would get the point more easily from very simple examples

Is it generally better to utilise data given rather then providing own made up ones?

Thanks.

Best wishes,

Michal

 

[Helen Evans]

Hi Michal
The sample solution provided is just that, a solution that is a good Pass ... but not the only solution that would pass so a very simple short explanation of the setting of the rates may well have been acceptable.
In relation to examples, I would where possible look to base my examples on the data given rather than make up my own examples. This is likely to be more suitable for our audience as they can directly relate it to the situation.
Best wishes
Helen

 

[Michal Piatra]

Thanks Helen