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#51




Okay I think I get it, they skipped a step

#52




Minor nitpick, should I round link ratios to three digits or use six when calculating reserves? I got a near .608 difference in what I calculated in reserves, I'm guessing (hoping) the exam won't have answers close enough to matter

#53




The projected total payment is PaidThroughCurrentYear * LinkRatio, and the reserve is ProjectedTotalPayment minus PaidThroughCurrentYear = PaidThroughCurrentYear * LinkRatio minus PaidThroughCurrentYear = PaidThroughCurrentYear * (LinkRatio  1).

#54




I was working on 17.2 in ASM STAM manual, and I found that the expected value of the limited distribution formula provided on the SOAs exam tables (A.5.1.4) gets me the wrong answer. If I use first principles to solve for what I think the expected value of the limited distribution (assuming k=1), I get that the second term should have an alpha in the numerator  this is consistent with the solution to 17.2.
Is the formula for the expected value of the limited distribution under A.5.1.4 of the exam tables wrong?
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#55




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#56




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#57




Question on Exercise 9.1 in the ASM STAM manual.
The answer states that Incurred losses of $45,000 are all in Policy Year 2. I'm confused why that would be since the loss occurred in Policy Year 1 and it was reported in Policy year 1 as well? I didn't understand the explanation in the manual. Thank you!
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#58




Hello, I have a question on Exercise 9.3 from the ASM manual.
The policies are six month policies and the rates are effective for two years. The question is asking for number of years of trend. Why is the Average accident date for policies sold in the two year period is stated to be 3 months after the midpoint of the two year period. Can someone explain how this is calculated? Thank you!
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#59




1) The problem is telling you that rates are effective for 2 years.
The assumption is that the average policy is sold at the midpoint of the two years, therefore sold at the 1 year mark. 2) The next assumption is that the average accident occurs in the middle of the policy period, which in this case is 6/2 = 3 month mark. Therefore your average accident is at the 1 year and 3 month mark. You have to take into consideration when the average policy is sold and when the average accident occurs.
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#60




You need to read that problem again. The problem says "A loss on a policy issued on 3/10/CY2 occurs on 12/15/CY2". That accident/ loss is associated with PY2.
[ QUOTE=RockOn;9425123]Question on Exercise 9.1 in the ASM STAM manual. The answer states that Incurred losses of $45,000 are all in Policy Year 2. I'm confused why that would be since the loss occurred in Policy Year 1 and it was reported in Policy year 1 as well? I didn't understand the explanation in the manual. Thank you![/quote]
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