4 practice problem like 2014.Fall # 18, 2a-question

trotro11trotro11
in Odomirok.19-RBC

I have a question about solution of 2a-question.

In 2a-Questions,
R5 RBC after discount is -581. (I get this part.)
and then to get total RBC for all lines,
we need to sum NWP RBC charge after discounts across all line of business and multiply PCF.

On Note 1(wiki), it says this negative charge for WC should probably be set to 0 before combining with the charges for the other lines.
However, the solution says 2400+1216+(-581) instead of 2400+1216+0.

Should I use negative value rather than setting it to 0?

Thanks
I appreciate your help

Comments

  • Staff - ACStaff - AC

    What the note explains is that the figures selected for the problem were not screened to avoid a negative RBC output, although the intention was not to effect such an output. The note is further making a supposition that you should use zero, should you ever encounter a negative RBC. A negative RBC is not something you will encounter in real life, or in exam questions. It was negligence not to follow through with the note's supposition in the numerical solution. Sorry about that.

Sign In or Register to comment.