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-   -   EOM2 External Forces (http://www.actuarialoutpost.com/actuarial_discussion_forum/showthread.php?t=319092)

K4s23 02-07-2017 01:20 AM

EOM2 External Forces
 
Hi all. Wondering if anyone can assist me with the following...

I've read a few old posts where folks have stated that the 8 determinants of sovereign spread are the external forces that affect SSx.

I don't necessarily disagree with this but then I would also argue that some of the possible changes in Latin America (listed in the Future Studies in the appendix of the EOM exercise) are the external forces that impact the 8 determinants of sovereign spread... and therefore you could argue that these external forces are the ones that impact SSx.

But then I could probably think of the external forces that impact the changes in LA which would then influence the determinants and then influence SSx.

My question is how far back should I go? I would say the 8 determinants are far enough but it seems odd to answer this Module without using the Possible changes in LA.

Any feedback would be much appreciated! Thank you and sorry if this is poorly worded...I suck at writing.

Actuarial Brewski 02-07-2017 09:45 AM

Quote:

Originally Posted by K4s23 (Post 8869559)
Hi all. Wondering if anyone can assist me with the following...

I've read a few old posts where folks have stated that the 8 determinants of sovereign spread are the external forces that affect SSx.

I don't necessarily disagree with this but then I would also argue that some of the possible changes in Latin America (listed in the Future Studies in the appendix of the EOM exercise) are the external forces that impact the 8 determinants of sovereign spread... and therefore you could argue that these external forces are the ones that impact SSx.

But then I could probably think of the external forces that impact the changes in LA which would then influence the determinants and then influence SSx.

My question is how far back should I go? I would say the 8 determinants are far enough but it seems odd to answer this Module without using the Possible changes in LA.

Any feedback would be much appreciated! Thank you and sorry if this is poorly worded...I suck at writing.



I submitted a few months ago.. I believe I tried to come up with possible external forces that would cause a change to each of the determinants listed. This way I was adding a new external force that wasnt already listed. I think either way would probably be acceptable and I'm not sure what the correct answer would be..

I think the most important part is listing out the external forces that you choose and explaining how they could impact SSx.

Hope this helps..

K4s23 02-07-2017 10:50 AM

Thanks a lot, very helpful!


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