SOA Exam FAM Sample Question 106
Study guide: Exam FAM
You are given the following information about AY2:
(i) The age-to-age paid loss development factors are:
| Development Year Factors | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1/0 | 2/1 | 3/2 | 4/3 | 5/4 | 6/5 | 7/6 | 8/7 | 9/8 | 10/9 | \infty/10 |
| 1.23 | 1.18 | 1.14 | 1.11 | 1.08 | 1.06 | 1.05 | 1.04 | 1.04 | 1.03 | r |
(ii) As of December 31, CY8, the estimated loss reserve is 12,200 based on the chain-ladder method.
(iii) During CY9, actual paid loss development equals the expected development.
(iv) As of December 31, CY9, the estimated loss reserve is 10,000 based on the chain-ladder method.
Calculate r.
- A) 1.092
- B) 1.141
- C) 1.162
- D) 1.187
- E) 1.220
Answer this question and see the worked solution