Chapter 17 - Other Assumptions Flashcards
1
Q
Following features can make product design riskier: (6)
A
- Lack of historical data
- High guarantees
- Policyholder options
- Overhead costs
- Complexity of design
- Untested market
2
Q
What is statistical risk?
A
The variability of cashflow components
3
Q
4 methods to assess level of stafistical risk:
A
- Analytically, by considering variances of individual parameter values used
- Using sensitivity analysis with deterministically assessed variations in oarameter values
- Using stochastic models for some, ornall of the parameter values
- By comparison with available market data
