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
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
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
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
The solution to problem 7 in Drill Problems Section F has been corrected. There were 2 typos.
Anita
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)
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
Here is a suggested study schedule. It is 13 weeks long, so if you started July 1, you would be through the schedule by the time of the live seminar. There is flexibility in DP on the order that you study the topics. But the schedule should help in terms of pacing, even if you don’t follow the order exactly.
Anita
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:
Feel free to email either of us with any questions about the seminar!
Good luck with your studying!!
Jeremy and Anita