2008 #32 Premium or Pure Premium???

[victorandjenny]

I am using TIA manual and I think the model answer is wrong.
I think the first step is to get profit percentage, but the model answer did not mention it at all.
If we consider profit,
then (250*.69+15)/(1-0.3-Q)=250

Then the premium for $10,999 ded. is like the following:

((250*0.6*(1-0.25)+250*0.6*0.15)+15)/(1-0.3-Q)=200


Anybody agrees with me?

[Vorian Atreides]

Or . . . state that you assume that Q = 0% and not worry about it.

Or assume that Q = 5% and move on with the problem.

No need to waste time an back into Q since that's not integral to the problem.

[victorandjenny]

Thanks for your reply.
I cannot agree with you because with the supplied information, we can get the Q. We do not need to assume anything on this point.


Or . . . state that you assume that Q = 0% and not worry about it.

Or assume that Q = 5% and move on with the problem.

No need to waste time an back into Q since that's not integral to the problem.

[Vorian Atreides]

Thanks for your reply.
I cannot agree with you because with the supplied information, we can get the Q. We do not need to assume anything on this point.
Your call on how you want to spend your time on the Exam.

[victorandjenny]

Well, your assumption very probably does not reconcile with the numbers provided. :)

Your call on how you want to spend your time on the Exam.

[Vorian Atreides]

Well, your assumption very probably does not reconcile with the numbers provided. :)
But it's not part of the grading rubric. ;-)

[victorandjenny]

Then how could you know beforehand? for example, in the exam, how do you know what they expect?


But it's not part of the grading rubric. ;-)

[SMMBB]

But it's not part of the grading rubric. ;-)

Are you serious, VA, or are you trying to be funny? Or maybe you're just as frustrated as victorandjenny... and me. Kuz I've been taking these exams for a while and I don't seem to know enough to implicitly assume that detail was unimportant. Nor would I necessarily trust that I'd get full credit if I went to the trouble to solve for Q.

I'd rather know how to tell that certain intermediate steps are unnecessary before the model solutions are released. I could use the extra time to get other points.

[Vorian Atreides]

My comment was more tongue-in-cheek than anything else. (Hence, the winky smilie.)

I agree with you in having a better idea of where the CAS is placing their grading emphasis for various types of problems. The CAS seems to believe that we'll just be able to intuit the right amount of detail for every problem type, but that doesn't develop except by considerable experience in the field (or considerable repetition of Exam problems) over which we're being tested.

That's why I've been advocating for the release of a grading rubric for each of the Exams. All of the arguments I've seen against doing it are either a well-disguised "We just don't trust candidates with that sort of information" (which I'm sure is not the position held by most of the leadership of the CAS) or are arguments that are equally applicable to saying that the CAS should not release sample answers (yet, they do).

[SMMBB]

Ok thanks, I guess. I had hopes that you knew of some kind of jedi trick to unlock the mysteries of the CAS grading process.

[Vorian Atreides]

Ok thanks, I guess. I had hopes that you knew of some kind of jedi trick to unlock the mysteries of the CAS grading process.
[CAS Appeal Committee] These aren't the points you're looking for. [/CAC]

http://deliciousbass09.files.wordpress.com/2011/04/kenobi1.jpg

[John Connor]

true. but it takes all of about 1 minute to do that. i'd just do it.

http://www.famouslogos.org/logos/nike-logo.jpg

[MightySchoop]

If I were grading this problem, I would have created the following rubric:

0.25 for calculating each of the following (0.5 total):
Loss amount with after application of deductible
ALAE amount

0.25 for putting each of the following in the correct place in the formula (1.25 total):
Losses after deductible,
ALAE
Fixed Expenses
Other Variable Expense
Commission

0.25 for not screwing up the arithmetic while getting the final answer.

I would see two final answers as acceptable without any assumptions stated -- the $214k shown in the sample answer, and the $200k you get if you take the time to calculate out the profit provision (which is -5%).

I would accept other final answers with varying profit provisions given that the candidate stated their assumption of that profit provision.

You should also note that, at this point, CAS rarely released more than one sample answer to any question.

[Vorian Atreides]

You should also note that, at this point, CAS rarely released more than one sample answer to any question.
It appears that the historical cases where multiple solutions were released are situations where an appeal was successfully made.

More recently, I think when they realized that there were two possible solutions that were materially different yet acceptable given ambiguity (whether intended by the EC or not) in the problem.

Note that this is pure speculation on my part.