Question

What are the main risks addressed by the computation of RSM?

a.

Market risk and credit risk

b.

Interest risk and mortality risk

c.

Operational risk and liquidity risk

d.

Reputational risk and regulatory risk

Answer: (b).Interest risk and mortality risk Explanation:The computation of RSM addresses interest risk, where the insurer may not earn what has been assumed in the pricing, and mortality risk, where the insurer may incur more claims than what has been assumed.

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Q. What are the main risks addressed by the computation of RSM?

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