Course 7 Seminar Case Study 7

[actuary vixen]

Hi, All.

Has anyone gotten to Case Study #7? I'm confused about the assignment. It asks us to estimate ranges for SS(x) and CE(x) for each scenario and the weighted average of our answers need to be equal to the data given. Does that mean we need to assign probabilities to each of the scenarios? Do we assume that the average of the ranges we choose is simply the midpoint? Am I totally off? Did I forget to read something?

Any help would be appreciated. I'd like to go into this thing with a little more confidence.

Thanks in advance.

[arwen]

I don't know for sure. But I did assign probabilities to each scenario and assumed that the midpoint of each range I came up with was the average. I think the point is less "know exactly what to do" and more "know what's needed, figure out some reasonable way to get there." Which is why I felt justified making the assumptions I made. Good luck, see you there I guess.

[GadgetGeek]

When we did this in Chicago, some assigned values and others did not. Some assumed only one scenario was emerging and others assumed that any of them could emerge. The actual assignment is the reply letter to AA Businessperson. These letters are shared with the person you sit next to, then groups are formed to further discuss. Waste most of your time on the extended case study. Take my advice for what it is worth since I will be doing this again in Atlanta.

[Me]

I would say make some assumptions and go with it. Nobody's going to grade (in an official sense) what you do on that assignment, so there's no use in sweating over whether you got it "right".

Personally, I found the #7 assignment amorphous enough that I didn't complete it. I passed the seminar anyway, but it probably would have benefited me more to stop worrying about it and just try to write something up.

You can also ask questions about it when you get there.

[actuary vixen]

Thanks for the input. I totally appreciate it.

[Oh Yeah]

GadgetGeek: I want to sit next to you since I'm a repeat as well. Oh the agony!!

[GadgetGeek]

See you there. I'll be the disgruntled one in section B.

[yo]

so, speaking of the extended case study ...

am i missing something? i don't know how to answer these questions at all. i understand that you won't elect gmib if equity returns are high. but the age 45 crossing at 3 percent longterm interest when equities return 8 percent?...? we don't know the mort assumptions ... is there something that makes age 45 special that i just don't see?

(and what do you do if the actual project leaves you this confused, other than stare at it for ten hours and then have a mental breakdown?)

[edited because i can't spell]

<font size=-1>[ This Message was edited by: yo on 2002-03-07 17:13 ]</font>

[actuary vixen]

Yo,

You're ahead of me. I'm going to tackle that this weekend. I'll let you know what I find out.

I'm still stuck on Case Study #8. Did anybody have any troubles with the Pivot Table? As soon as I tried the pivot table with the age in the "Page" field, it told me there were too many unique elements to make a Pivot Table. Has anyone encountered this before?

Also, I don't know how to work the templates? I just never had to deal with them before. Can anyone give me insight? I guess I'm not as technically inclined as I thought.

Any input would be totally appreciated!!!

[Me]

I had trouble with the pivot tables too. Mine had something to do with having the recommended version of Excel, but the assignment was written by someone with a later version. I was all concerned about it. For me, at least, it ended up not making any difference. In my seminar we never made a pivot table. And if you have to and you're having trouble, you've got a whole 3+ days to get the people there to explain it to you.

As for the case study, I'd say do your best to understand as much as possible, but try not to get hung up on anything in particular. Try just making a list of questions about things that confuse you that you can ask when you get there. They allow lots of time for that sort of thing.

And if the final project confuses you, don't sweat. Unlike all the other actuarial exams, the instructors CAN give you assistance and answer questions in this one. You can go talk about it with them and ask questions until you know what you're being asked to do.

[GadgetGeek]

To use the template. in word, do file|new from the menu and it should bring up a box that lets you select from templates. If the CS8 one isn't there, you might have to copy it to the directory with the others, or add the path under the tool|options (I think) menu. I don't recall having any issues with the pivot table. What exactly are you trying to do?

As for the extended case study, that is also on my weekend to-do list.

[yo]

i think to get around the "age" in the page field problem, i added a column with 10-year age ranges and used that instead.

and i didn't use the template -- i saved the 1997 report with a new name and updated that. that way i was sure the table of contents would work since i never saw that before.

[actuary vixen]

Yo,

I looked at the extended study this weekend. I don't think they were asking for specific numerical answers. I think the jist of the assignment was that there are forces working against each other (mortality, equity return, interest rate) but at some point one force over takes the other. For example, once equity returns get below a certain point, less revenue comes in because the charge is a % of Accumulation Value, also deficiencies become more likely, therefore, there will be more negative PV of Cash Flows.

Hopefully I wasn't confusing. Anybody disagree?