Drill problem F.5b

Solution has a typo:  discounting by 5%, so the denominator is 1.05 (not 1.04).  All values are correct, however.

PV(Guar Ben) = [100000 x q60 v + 1p60 v x 75,000 A61 ]

= (100000 x 0.01618 /1.05 + (1 – .01618)/1.05 x 75 x 468.77]

= 34,482.76

New material posted–more problems

We have posted all of the handouts from the live seminar.  We also posted more problems (practice problems  + drill problems).

This includes:

Analysis of 8I exam questions

Practice problems (12) + More practice problems (5)

Drill problems–25 more

Examples from sections C, D, and F used during the seminar–this is basically another 3 sets of drill problems.  Especially useful for those of you who did not attend the live seminar

Hope your studying is going well.

Anita and Jeremy

Drill Problem C14, part a

There were some errors in the solution to problem 14 part a.

In the chart, PV#1 at hurdle rate, year 4, is 4.79 (not 4.29).  That was a typo.  All the answers used the 4.79 value.

When calculating the embedded value for product 2, all the calculations are correct.  However, in my explanation I typed 1.06 instead of 1.12.  Sorry.

Anita

Section D Outline updated

The section D outline has been updated to remove SN 108 (Asset & Liability Management) which was dropped from the syllabus.  (There was no video for that SN.)  I just forgot to delete it from my outline.

Anita

DP Syllabus Differences from 2008

For those of you who took the 2008 DP exam and are now studying for the 2009 version, here are the differences between the 2 syllabi:

Dropped material:  SN100, SN108, SN109, Macro Pricing, and A&D, Ch 8

New Study Notes: SN113, SN114, and SN115.  SN804 has been added, but it is the same as the Appendix to LIMRA, Ch. 7 (which was already on the syllabus)

New Readings: Stochastic Pricing of Embedded Options, ASOP 41

Updated SN/Readings:  2008 Supplement to DeRochers book, update to SN109 (Moodly’s Investors Service Corporate Default and Recovery Rates)

Recent updates/corrections

We have posted some recent corrections/updates:

Drill Problems Section A:  solution to #1.  All values are correct.  I left out the denominator (1 – .08) when dealing with the partial withdrawal

Section C.1.4: Taxes.  In the equation for DAC tax, the last multiple should be 5% (correct in chart, was incorrect in the equation)

Case Study:  we have posted a summary of the case study.  I recommend highly that you read the full case study and get familiar with it before the exam.  You will be given a copy of the case study as part of the examination booklet when you take the exam.

Drill problems, section B:  I added 3 drill problems dealing with 2 of the new study notes.

Hope your studying is going well.

Anita

Welcome to the 2009 TIA ILA-DP Seminar!

Thanks for your interest in our seminar for this year.  We hope that you will find our seminar helpful as you prepare for this exam.  There is a ton of material to cover, but fortunately most of it is pretty straightforward.

As in the past, we will cover all of the material in the syllabus in both our online seminar and the live seminar.  We have combined material that appears in multiple places of the syllabus to avoid repeating information.  We provide numerous exam-type practice problems, along with detailed solutions.  We also give you exam tips on how to take the actual exam and spend your time wisely.

Some new features for this year:

  • Drill problems at the end of each section, designed to help reinforce the material from each section.  These will be focused on the calculation-based questions so that you can be ready when these questions show up on the exam.
  • Video solutions to the past DP exam questions.  This will help you see how to approach the questions and how to maximize your score on the exam.

Feel free to email either of us with any questions about the seminar!

Good luck with your studying!!

Jeremy and Anita