Difference between revisions of "Bright Line Indicator Test"
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: Therefore, the financial analyst should pursue comments from the AA regarding material adverse deviation. | : Therefore, the financial analyst should pursue comments from the AA regarding material adverse deviation. | ||
| − | Here are 2 old exam problems regarding the Bright Line Indicator Test: | + | '''Here are 2 old exam problems regarding the Bright Line Indicator Test''': |
| − | : [https://www.battleacts6us.ca/pdf/Exam_(2019_1-Spring)/(2019_1-Spring)_(19)_v2.pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] | + | : [https://www.battleacts6us.ca/pdf/Exam_(2019_1-Spring)/(2019_1-Spring)_(19)_v2.pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2019.Spring #19)'''</span> |
: [https://www.battleacts6us.ca/pdf/Exam_(2016_2-Fall)/(2016_2-Fall)_(20).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2016.Fall #20)'''</span> | : [https://www.battleacts6us.ca/pdf/Exam_(2016_2-Fall)/(2016_2-Fall)_(20).pdf <span style='font-size: 12px; background-color: yellow; border: solid; border-width: 1px; border-radius: 5px; padding: 2px 5px 2px 5px; margin: 5px;'>E</span>] <span style="color: red;">'''(2016.Fall #20)'''</span> | ||
Revision as of 14:07, 7 September 2019
The Bright Line Indicator Test is discussed in COPLFR.SAO as part of the SAO but it requires knowledge from the RBC chapter in Odomirok, Alice's 1st Day. That section will only take a few minutes to read so you should do that before proceeding.
Question: what is the bright line indicator test
- IF
- [1] the AA does not address material adverse deviation
- [2] 10% x (net L & LAE) > TAC – CAL
- THEN
- financial analyst should pursue comments from the AA
- IF
Example:
- Suppose the AA did not address material adverse deviation and that:
- net L & LAE = 500
- TAC = 600
- ACL = 280
- Then:
- 10% x (net L & LAE) = 10% x 500 = 50 > 40 = (600 – 560) = (TAC – CAL) = (TAC – 2 x ACL)
- Therefore, the financial analyst should pursue comments from the AA regarding material adverse deviation.
Here are 2 old exam problems regarding the Bright Line Indicator Test:
