Assistance, working solns!

1.Delicious Snacks, a large multinational company manufacturing snack based

products, has decided to launch a takeover of the Crispy Crisp Company. The Crispy

Crisp Company was originally a crisp manufacturer selling crisps in its domestic

market. However, recently it has extended its range into other snack products, but it

still only sells in its home market.

(i) Describe the issues that the following people should consider in relation to the

potential takeover:

(a) the competition authorities within Crispy Crisps' home market.

(b) the directors of the Crispy Crisp Company.

(c) the shareholders of the Crispy Crisp Company.

(d) the government of Crispy Crisps' home market.

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(ii) Describe the actions that the bodies mentioned in part (i) could take to mitigate

any of the issues mentioned in your answer.

2. A company sponsors a defined contribution pension scheme where it contributes 10%

of salary. Members can contribute at a level of their choice between 0% and 10% of

salary. On retirement at age 65 each member's accumulated fund is converted to an

inflation-linked pension with a 50% spouse's pension attached to it. The conversion

rates are set each year by an actuary.

Over the last five years, only 80% of eligible members have chosen to join the

scheme, and the average contribution rate of those members has only been 2%.

(i) Suggest ways by which the company could increase the participation rates and

contribution levels. [5]

The default investment fund choice for the scheme is a lifestyling fund.

(ii) Explain what is meant by lifestyling and why it is often used. [3]

Each year members are sent personal benefit statements.

(iii) Suggest what information could be included in these statements. [5]

(iv) Explain why it is important that the information included in the members'

benefit statements is clear and relevant. [2]

The company is considering offering income drawdown at retirement as an alternative

to annuity conversion.

(v) Explain what is meant by income drawdown. [1]

(vi) Set out the factors a member should consider when deciding between income

drawdown and an annuity. [4]

(vii) Comment on the changes that may be required to the default investment fund

if income drawdown is to be offered. [3]

(viii) Suggest other options the scheme could offer at retirement

3.

A pharmaceutical company is undertaking trials on a new drug which, it claims, cur a particularly uncomfortable but not life threatening condition. It has conducted extensive testing of the drug on a large group of people suffering from the condition and has noticed that the drug is much more effective in some groups of patients that others. It has fitted a Cox regression for the hazard of symptoms disappearing h() with three parameters h(t) = ho(f)exp(SBs + ABA +GBG) where Bs. By, and BG are parameters and . S represents the sex of the patient and takes a value of 1 if the patient is female, if male. . A represents the age, in years minus 20, of the patient when the drug was administered. . G takes the value 1 if the patient attended a gym, 0 otherwise. The company has discovered the following, where the age given is the age when the drug was administered: . a 25 year old female who attended a gym had a hazard of symptoms disappearin equal to twice that of a male of the same age who did not attend a gym; . a 45 year old male who did not attend a gym had a hazard of symptoms disappearing half that of a 43 year old male who attended a gym; and . a 32 year old female who attended a gym had a hazard of symptoms disappearin 60% greater than that of a 45 year old female who did not attend a gym. (i) Calculate the values of the parameters By. By, and PG- (ii) Determine for which group of people the drug is most effective. The probability that a woman who attended a gym and was aged 38 years when she was given the drug still had symptoms of the condition after 28 days was found be 0.75. (iii) Calculate the probability of still having symptoms after 28 days for a male aged 26 years when given the drug who did not attend a gym