Formulas from FAP FA Model Solutions June 2020

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    DJS28
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    Does anyone know where the following 2 formulas were outlined in the study material? I’ve looked all over the module slides and recommended textbooks and had no luck.

    Cost Sharing = [(Base Year PMPM Claim * Trend) – Deductible and Limit Costs] * Coinsurance Percentage + Deductible and Limit Costs

    Profit = (1 – Variable Expenses %) * Base Premium – Fixed Expenses –[(Base Year PMPM Claim * Trend) – Cost Sharing]

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