F18 Q2b

Just a general question since they didn't state this in the examiners report but were they expecting you to list all of these answers, one of these answers, or somewhere in between?

Comments

  • From the sample answers, it seems they only wanted 1 of those bullet points for the full 0.5 pts for each sub-part. And the question didn't specify 2 distinct points. The sample answers do seem a little short though because normally for 0.5 pts, you have to list 2 separate facts for 0.25 pts each. Looks like they were lenient here.

  • Hi.

    For B. ii., one of the model solutions is:

    Stock companies can hold less capital than ****reciprocal ****insurers because they have the ability to raise capital by selling stock.

    My answer was:

    ****Mutuals ****may need higher minimum capital and surplus requirements because they aren't publicly traded and can't obtain capital as quickly as insurer's that can issue stock.

    I think my answer is valid, but want to make sure. Thanks.

  • It sounds like you're saying the same thing, just in different words. The key idea was that stock companies can raise money quickly by issuing stock .

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