Question

Why is the intended investment mix for a contract affected by the level of free assets or capital available to the company?

a.

Free assets determine the level of new business strain

b.

More free assets allow for a less risky investment strategy

c.

Less free assets require more matching to control investment risk

d.

All of the above

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (d).All of the above Explanation:The intended investment mix for a contract is affected by the level of free assets or capital available to the company because free assets determine the level of new business strain, allow for a less risky investment strategy, and require more matching to control investment risk when they are less.

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Q. Why is the intended investment mix for a contract affected by the level of free assets or capital available to the company?
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