Hi, These are exceptionally tricky questions to deal with in an exam situation and unsurprisingly I did poorly on it along with the majority of students who sat this paper. Do you have any tips for how to approach such a technical question where there are no course notes and/or the question relates to old exams (I know that the ifoa CAN ask questions from other exams but the reality is most students don’t have time to relearn ST1 and SA1!) The paper prior to this had a similar style question on internal modelling of Operational SCRs. Becca
Hopefully you would have some memory of this type of material from previous subjects. If you don't then try and think what the benefits are of having individual cashflows rather than a single formula approach. Hopefully taking a step back and thinking practically would help generate a few ideas. For the final part, hopefully some of the steps in modelling are again familiar. If you really can't remember them, again, go back to basics. What does a model need - data, assumptions and cashflow projections. So, discuss these, particularly thinking about the stochastic assumptions for this question (what variables will be stochastic, which will still be deterministic etc). There may be a question that you are less familiar with on the paper - don't let it put you off (and I fully appreciate this is easier said than done!). Do something sensible, break it up, and earn what marks you can. Don't spend too long on it, stick to the 1.8 mins/mark (or slightly longer now!) then move on (hopefully to something more familiar!).
