I don't have the study aid, but if it is anything like the exhibits in the
paper, there isn't any rounding. Calculations are not based on the integer
value shown on the exhibit. Same applies to discount factors (don't round
to 3 decimal places).
----------
> From: SNICHOLS@genre.com
> To: MVadz@aol.com
> Cc: studygroup6@lists.casact.org
> Subject: Asset Share Pricing Model
> Date: Tuesday, March 24, 1998 8:02 AM
>
>
> I am also having a fixed expense problem. On question 30 of the 1997
exam,
> why isn't the fixed expense trended?
>
> To: studygroup6
> cc: (bcc: Susan K. Nichols)
> From: MVadz @ aol.com
> Date: 03/23/98 10:07:11 PM
> Subject: Asset Share Pricing Model
>
>
>
>
> I am having a little trouble duplicating an exhibit in the NEAS Study Aid
> 98-6-16 (not 16B) on Personal Auto Premiums. On page 25, it shows the
> answer
> to the sample problem. I cannot match the Fixed Expenses for renewals
> (Column
> (7)). I understand why I begin with $28 and increase by 4% a year.
> However,
> as I calculate down the column, my answers become further off. For
> example:
> Policy Year Renewal (Fixed)
> 1 0
> 2 29
> 3 30
> 4 31
> 5 33
> 6 34
> 7 35
> 8 37
> etc.
> As you can see, I'm getting further from the answers in the Study Aid.
Can
> anyone help me to clear this up? Also, should I be rounding after each
> years
> calculation or not? (i.e. for policy year 4, should it be 30*1.04 or
> 28*(1.04)(1.04)(1.04)?)
>
>
>
>