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in BUS 3024S - Contingencies by (1.7k points)

Hi, this is from a past excel question. The memo assumed the surrender rates occur at year end only but I can't seem to see where they state this in the question. I realize that they are paid at the end of the year but this shouldn't be an indication that they are rates at year end. Should we assume that if not stated that rates occur at the end (except for mortality) or am I missing something? 


1 Answer

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by (240 points)

They said the surrender will be paid at the end of the year of surrender. I would assume that the rates are year-end surrender rates unless stated otherwise. Also, just bear in mind that if you are not sure about something, you can always make an assumption and write it down. If the assumption makes sense, you would get full marks if your calculations are correct. 
by (1.7k points)
I Hi, but the death benefit is paid at the end of year of death but the death rate is not one used at year end, it’s used throughout the year. So I’m guessing we are just assuming year end for surrender unless stated otherwise.