Hi Coralie I've come across 2 accounts questions in which you are asked to calculate an investment return for the year in the absence of (Q5 Sep 2008, Q5 April 2006) 2006 solution used (UPR b/f + O/s Claims reserve b/f - DAC b/f)* investment return 2008 solution used (UPR b/f + O/s claims reserves b/f + 1/2 * cashflow during the year) * investment return where cashflow is defined as NWP - paid expenses - paid claims are they both correct? doesn't it matter which one I choose to use? why aren't the c/f figures being used instead in the first solution?
I understand the examiners will give credit for any valid method, and as they have used both methods, then they are both valid. I would go for whatever seems most appropriate in the question.
