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Practise Exam/ Unrealized Capital Gains

October 1st, 2011

A practice exam is now available in the “Additional Questions” section of the website.

I am receiving a lot of emails about the treatment of unrealized capital gains when calculating the surplus change. You need to look carefully at how these gains are expressed in the question (the question should either state this or imply it):
-if the gains are (cumulative) values, you need to calculate the difference between the 2 statement values
-if the gain is the total gain during the year, in that case you can use just the latest value.

Bottom line, your objective is to calculate the increase in the unrealized capital gains during the year, as this is what directly increases surplus.

If you are unsure, as always state your assumption and answer acccordingly.

Angelo Uncategorized

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