I just took 2012, and I do not understand this question. At. All.
I tried dictating the question, but it confused me more. Basically you calculate an asset weighted beta (surplus and reserves) and a liability weighted beta (reserves) and add them up and divide by surplus.
Why do you effectively double count liabilities with both betas, and why aren't liabilities negative?
I'm not going to try to explain the combined ratio, because thinking of that question in the framework of an underwriting profit provision (as opposed to investment income) isn't something I'm following.
I'd hate for this question to pop again again on 2015, and need help understanding it.
I tried dictating the question, but it confused me more. Basically you calculate an asset weighted beta (surplus and reserves) and a liability weighted beta (reserves) and add them up and divide by surplus.
Why do you effectively double count liabilities with both betas, and why aren't liabilities negative?
I'm not going to try to explain the combined ratio, because thinking of that question in the framework of an underwriting profit provision (as opposed to investment income) isn't something I'm following.
I'd hate for this question to pop again again on 2015, and need help understanding it.
2012 #11 Cummins CAPM
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