Question

How is the investment returns assumption adjusted to include a margin?

a.

Subtracting the margin from the best estimate investment return

b.

Adding the margin to the best estimate investment return

c.

Multiplying the margin by the best estimate investment return

d.

Dividing the best estimate investment return by the margin

Answer: (a).Subtracting the margin from the best estimate investment return Explanation:The pricing investment return (Ip) is calculated by subtracting the margin from the best estimate investment return (Ib). This adjustment accounts for the potential variability in actual investment returns compared to the expected values.

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Q. How is the investment returns assumption adjusted to include a margin?

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