Exam 6C Practice Question 10
Study guide: Exam 6C
A one-year contract measured under the general measurement approach has a CSM of 1,000 at initial recognition. Its policy limit declines over the year, and the insurer uses the limit in force as its coverage units:
| Quarter | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| Coverage units (limit, in thousands) | 400 | 300 | 200 | 100 |
There is no discounting and no change in assumptions. The policyholder cancels the contract at the end of Q2.
Calculate the CSM recognized in profit or loss in Q2.
- A) 180
- B) 250
- C) 300
- D) 600
- E) 1,000
Answer this question and see the worked solution