September 2004 Paper 1 Qu.2(v)

Discussion in 'SA3' started by ActEdStudent, Mar 29, 2008.

  1. ActEdStudent

    ActEdStudent Member

    Would a change in interest rates not also affect the market value of some of the assets and therefore potentially affect solvency? Thanks.
     
  2. NeedToQualify

    NeedToQualify Member

    Yes...

    Perhaps the question is pre- "assets at market value" statutory rules?
     
  3. Ian Senator

    Ian Senator ActEd Tutor Staff Member

    I'm lost - that question is about guidance notes and there isn't a part (v)?
     
  4. ActEdStudent

    ActEdStudent Member

    Sorry, I meant question 1(a) of that paper, don't know where the 2(v) came from!
     
  5. Ian Senator

    Ian Senator ActEd Tutor Staff Member

    As the solution says, depends on the purpose of the valuation. Asset valuation rules aren't in the course any more, but generally speaking they are valued at market value for statutory purposes. It is certainly possible that a change in interest rate might change the market value of some assets and not others.
     

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