S2019 Q7a
For spring 2019Q7 a, I detrend the 65% for AY 2017 and 2016 but the answer didn't do detrending.
May I know in general when detrending is needed?
Thanks
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For spring 2019Q7 a, I detrend the 65% for AY 2017 and 2016 but the answer didn't do detrending.
May I know in general when detrending is needed?
Thanks
Comments
That's a very good question. I think it may be valid to detrend the 65% using the 3% premium trend and 4% loss trend, but for 0.5 pts, they probably didn't require you to do this for full credit. Bornhuetter-Ferguson problems are usually a straightforward application of the basic BF formula. If you're given the ECR, you can generally assume you can use it without adjustment.
If you have to calculate the ECR yourself, then it's more likely they would want you to apply trending and possibly other adjustments to arrive at an appropriate ECR.