Question

How do the terms "fixed" and "flat" relate to expense assumptions?

a.

They refer to expenses that do not vary by premium size

b.

They determine the recent experience of the company

c.

They influence the choice of distribution channels

d.

They confirm to industry-wide practices

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (a).They refer to expenses that do not vary by premium size Explanation:The terms "fixed" and "flat" in expense assumptions refer to expenses that do not vary by premium size, although they may not be fixed or flat in the full sense of the word.

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Q. How do the terms "fixed" and "flat" relate to expense assumptions?
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