今天高顿网校小编一上午汇总了北美SOA真题Course8F(二)——SOA精算师考试,请逐一进行章节复习。
  Questions 11-12 pertain to the Case Study.
  Each question should be answered independently.
 
  12. (8 points) Zoolander is considering an acquisition of ABC Annuity, a small annuity
  company. ABC Annuity focuses entirely on selling fixed annuities through independent
  brokers. The company was founded only five years ago and has grown rapidly.
  At December 31, 2004, ABC Annuity reported the following numbers in their financial
  statements:
  ? GAAP reserves = $3,450 million
  ? Statutory reserves = $3,500 million
  ? Required Capital = $157 million
  Projected financial statement values (in millions) for ABC Annuity are below:
  Income Statement Data 2005 2006 2007
  Premium 267 268 270
  Investment Income 226 243 261世纪考试网版权所有
  Death Benefits 2 7 5
  Surrender Benefits 100 101 101
  Operating Expenses 30 32 35
  Commissions 9 9 9
  Taxes 8 9 9
  Balance Sheet Data as of December 31 2005 2006 2007
  Statutory Reserves 3,763 4,045 4,348
  GAAP Reserves 3,462 3,721 4,000
  Tax Reserves 3,650 3,923 4,218
  Required Capital 169 182 196
  In preparation for a potential bid, CEO Tomas Lyon asks you to *uate the acquisition.
  (a) (1 point) Identify additional data needed to perform an actuarial appraisal on
  ABC Annuity.
  (b) (2 points) Calculate the present value of distributable cash flows for the years
  provided using Zoolander’s desired WACC as the discount rate. Assume cash
  flows occur at the end of each year. Show your work.
  (c) (3 points) Outline the key considerations that should be taken into account in
  deciding to proceed with the acquisition.
  COURSE 8: Fall 2005 - 13 - GO ON TO NEXT PAGE
  Finance Segment
  Afternoon Session
  12. Continued
  (d) (2 points) Suggest at least three distinct ways that capital could be raised by
  Zoolander to acquire ABC Annuity. For each, indicate:
  i. how appropriate an option this would be for Zoolander in raising capital
  for this acquisition
  ii. costs associated with implementing that option
  iii. the impact on existing Zoolander equity holders.
 
  13. (4 points) Leede is a medium-sized Property and Casualty Insurance Company that is
  publicly owned. Leede’s marginal tax rate is 30%.
  An investment in one of the following two par bonds is being considered:
  ? Bond #1 – Fully taxable bond yielding 8% per year maturing in 2 years
  ? Bond #2 – Tax-exempt bond yielding 6% per year maturing in 2 years
  Weather models suggest a 60% chance of extreme hurricane activity over the next two
  years that would completely eliminate all of Leede’s taxable income.
  (a) Assuming both bonds have the same risk profile, demonstrate which investment
  Leede should choose today. Show your work.
  (b) Assume after one year the bonds are still trading at par. There has been no
  hurricane damage and there is only a 10% chance of hurricane loss over the next
  year. Calculate the level of transaction costs that would make Leede indifferent to
  switching investments at that time.
  (c) Explain how your answer in (b) would be impacted if the risk profiles of the two
  bonds were no longer the same.
  COURSE 8: Fall 2005 - 14 - GO ON TO NEXT PAGE
  Finance Segment
  Afternoon Session
 
  14. (6 points) You are the CFO of a mid-sized, publicly traded U.S. corporation that
  develops software for the retail industry. The firm has been in existence for twenty years.
  Initial growth was explosive,
  but over the last four to six years both your firm’s and the
  industry’s growth rates have stabilized. Thanks to your efficient management, the firm
  has shown consistent profits over this period.
  The CEO has expressed an interest in instituting a dividend for the first time.
  (a) Compare and contrast the signaling model and agency cost model for corporate
  dividends. Describe what outcomes would be predicted under each if your firm
  instituted a dividend.
  (b) Describe the firm-specific factors to be considered in deciding whether or not to
  institute a dividend. Relate these factors to your firm’s situation and indicate
  whether or not they support the CEO’s idea.
  (c) Recommend a dividend policy for the corporation and support your answer.
  COURSE 8: Fall 2005 - 15 - STOP
  Finance Segment
  Afternoon Session
 
  15. (5 points) You are the CFO for TUNA Life Insurance Company. TUNA has three major
  blocks of business: an annuity line, a life insurance line, and an individual disability line.
  Below are statistics for the three lines of business:
  Line of
  Business Pre-tax Return
  on Assets (ROA)
  Allocated
  Debt
  Capital
  Allocated
  Equity Capital世纪考试网版权所有
  Annuity 9% $90 million $10 million
  Life Insurance 10% $70 million $30 million
  Individual Disability 11% $50 million $50 million
  TUNA currently pays 7% to service its debt. Equity investors require a 13% return. The
  marginal tax rate for TUNA is 30%.
  (a) Calculate the Economic Value Added (EVA) for each business unit. Show your
  work.
  (b) TUNA’s chief actuary wants to implement product pricing changes so that all
  lines of business have a positive EVA. Assuming that the allocated debt and
  equity capital do not change, establish minimum ROAs for each business line to
  achieve. Show your work.
  (c) Explain the advantages and disadvantages of an EVA financial management
  system for monitoring business line performance.
  **END OF EXAMINATION**
  AFTERNOON SESSION
  高顿网校之心灵鸡汤:青年的朝气倘已消失,前进不已的好奇心已衰退以后,人生就没有意义了。——穆勒