CFA Level 3 | PWM: Net Payment Cost Index

[@BboyGraphicx]

That second method is a real time saver!

[@meiqinchen1387]

amazing illustration and like the alternative!

[@alexzhou4907]

So if there is a 30,000 cash value at the end of the policy as you have in the Surrender Cost calc, you can also use the alternative way of calculating the 30,000 pmt value in BGM and get the same result. It would be 22,000-4,245.28-769.37 = 16,985.35

[@FabianMoa]

That works too 👍

[@jespermadsen4348]

Appreciate your videos, Mr Moa!

[@FabianMoa]

Thank you, Jesper!

[@brendanobrien9855]

This is great Fabian. Thanks. Can you do examples of Human Life Value Method + Needs analysis next? I find them incredibly confusing!

[@FabianMoa]

I will consider that 👍

[@Khuder-erdeneAdilbish]

can you briefly point out difference between surrender cost index vs net payment cost index?

[@madmax5435]

great trick at the end fabian!

[@FabianMoa]

No problem! Disappointingly, I did not come up with the method, rather it was my Level 3 student who suggested the method. Cheers!

[@madmax5435]

Hi Fabian, I have a request for lvl 3! Could you review an effective annual rate in bps on a loan. involving 180day libor / and a call option premium hedging interest rate risk example please!!!

[@rikki146]

neat!

[@danahousa9118]

how do you calculate the dividend without financial calculator

[@FabianMoa]

You can use the formula (Level 1 QM) for Future Value of an Annuity. 4500/0.06 × (1.06^20-1)

[@danahousa9118]

Fabian Moa but what if the payment amount per year was not given, only the total amount given after the time period without consideration of the interest rate? thank you for answering.