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CM1B April 2024 Answer Booklet (1)
CM1B April 2024 Answer Booklet (1)
CM1B April 2024 Answer Booklet (1)
Y/E cashflow
- 1,000,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
- 125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
125,000
-
-
-
Project A Project B
(i) IRR
(ii) NPV
(iii) DPP
(iv)
mux 0.03
Term Assurance
Interest rate for pricing the decreasing term assurance 3.5% p.a. effective
Expenses None
Surrenders None
The company sets the level annual premium for the decreasing term assurance by equating the expected
present value of premiums and the expected present value of benefits.