Sample-3
There seems to be an error in either the solution regarding eligibility of group 3, or the statement for threshold # 2.
The problem states that under threshold# 2 the dollar difference between the PAA and GMA must be ≤ 1% of annual insurance revenue of the group of contracts.
The solution then states that the dollar difference is -10%, which is said to be above the threshold of 1%.
Is it that threshold # 2 is incorrectly formulated, and should have been :"The dollar difference between the PAA and the general measurement approach (GMA) must be less than or equal to (≤) within 1% of annual insurance revenue of the group of contracts."?
Comments
Yeah the wording needs to be rejigged. It should actually say that the absolute dollar difference should be less than 1% of annual insurance revenue of the group of contracts.
I think your formulation wouldn't work cause I would read that as the dollar difference between PAA and GMA must be within [0.99Total revenue, 1.01Total Revenue] which would be pretty wack as that means a subset of very large differences would be PAA eligible, but everything else would not be PAA eligible even if your difference is 0
Makes sense, thanks! If I see that in the exam, should I assume they mean the absolute dollar difference, and state that assumption?