Question

What are the two methods of determination of price?

a.

Formula method and Cash deposit method

b.

Formula method and Investment method

c.

Calculation method and Cash flow method

d.

Premium method and Profit method

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (a).Formula method and Cash deposit method Explanation:The two methods of determination of price are the formula method and the cash flow method. The formula method involves using equations to determine premiums, while the cash flow method projects expected incomes and outflows into the future to determine the best premium rate or charges.

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Q. What are the two methods of determination of price?
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