Investment Income Reply

Jim Matusiak ( JMATP@allstate.com )
Wed, 25 Feb 1998 14:21:30 -0600

The one you see comes from the fact that you are given an investible
liabilities to surplus ratio and not an investible assets ratio. Remember
from accounting that assets=liabilities+surplus

so the investible assets to surplus ratio (IA/S)=

(liabilities+surplus)/surplus = (liabilities/surplus) + 1

so the correct answer is 1.28