SOA Exam FAM Sample Question 94
Study guide: Exam FAM
An actuary is establishing reserves for a group of policies as of December 31, CY3. You are given the following table of reserve estimates for AY1 and AY2:
| Reserve estimates as of December 31, CY3 | |||
|---|---|---|---|
R_{BF} |
R_{LR} |
R_{CL} |
|
| AY1 | 400,000 | 250,000 | 437,500 |
| AY2 | 1,120,000 | 1,200,000 | 1,050,000 |
where R_{BF} is the loss reserve under the Bornhuetter-Ferguson method, R_{LR} is the loss reserve under the Expected Loss Ratio method, and R_{CL} is the loss reserve under the Chain Ladder method.
Calculate f_2, the loss development factor from the paid-loss-development triangle at duration 2.
- A) 1.250
- B) 1.500
- C) 1.875
- D) 2.150
- E) 2.500
Answer this question and see the worked solution