Exam 6, Fall 2015 exam question

[Number34]

Hi, I’m trying to go back through old Exam 6 questions to study, and I’m stumped on one problem that I hope someone can help with. In the Fall 2015 Exam 6, question 20 the answer uses the formula “RTI = $320m(4%) – $3.4m + 0.15($540m)(3%) + ($140m – x)(5.5%) + 0.15(x)(4%)= $19.53m – 4.9%(x)”. I’m having a hard time figuring out where the 0.15 is coming from used in the equation. Can anyone offer some insight? Here is a link to the exam: https://www.casact.org/admissions/studytools/exam6u/f15-6u.pdf. Thanks in advance for any help.

[residualagent]

Hi Number34 – I am not sure what manual you are using, and if this is your first go around for 6.  The 15% is/was for the proration provision.  Last sitting it was 15%.  It looks like now it’s 25%.  (You asking this question actually helped me so thanks!)

[Number34]

Hi residualagent – Thank you so much for clarifying where that 0.15 was coming from. I’m using the 20210 TIA study manual and it looks like they currently have 25% proration provision for tax exempt income. Since it sounds like that value could change in future exams, do you know the best way of keeping track of the value is?

[residualagent]

Hopefully you pass this sitting and it’s a non-issue, but I would say just make sure to look at the latest syllabus to see which papers were added/removed/updated.  The CAS doesn’t go back and update the old exam questions for the latest syllabus so that is a risk for sure if you are pulling the exams straight from the website.  TIA does update their questions/solutions to reflect the changes as far as I am aware, so I think you should be okay so long as you are using the latest version.

[Number34]

That’s unfortunate news. This is my first time sitting for the exam and in the past I’ve gotten by just reading the source material once and then just doing practice problems. It sounds like this exam is a lot more volatile than previous exams, which makes it difficult to use previous exams to study.

[residualagent]

I think every exam has it’s quirks, but either way it is annoying.  I realized last sitting I was assuming the old range for one of the IRIS ratios – thankfully noticed before the exam!

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