Sep 2013 Q1

Discussion in 'SP8' started by code9063, Apr 10, 2015.

  1. code9063

    code9063 Member

    Is it correct to talk about change in exposure due to cancellations and MTAs?
     
  2. Darren Michaels

    Darren Michaels ActEd Tutor Staff Member

    Possibly, but the earnings pattern would typically be estimated at the beginning of the year when you wont know about any actual cancellations or MTAs.

    However, you could build some assumptions about them in to your earnings pattern.

    This is consistent with the comment in the solution about there to be a desire for the earnings pattern to be consistent with exposure.
     

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