Pls do not handwrite the answer, this is for easy reading === This what wash given to solve the question ===

The table below was extracted from page 219 of the Great Eastern Insurance Singapore 2017 annual report.

Use the information in the table to answer the question below.

a)Consider the first item " Interest Rates" i) Analyse and explain why an increase of 100 basis point results in a decrease in profits.

ii) Analyse and explain why, for the same change in interest rates in both directions, the magnitude of the corresponding changes in profits(ignoring the sign) are different. b) Consider the changes in the variable used for the sensitivity analysis of each of the items from (a) to (f). Based on the value of those changes, analyze and discuss the relative risks of each of the items from (a) to (f).

c) Appraise and describe 4 other risks that Great Eastern should take into account, Explain why u choose this risks.

===================================================== Sensitivity analysis on financial risks.(continued) market risk sensitivity analysis:

Impact on Profit After Tax , Impact on Equity in Singapore Dollars(millions) | 31 dec 2017 | 31 dec 2016 | 31 dec 2017| 31 dec 2016 |

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Change in variables: a) Interest Rate | 31 dec 2017 | 31 dec 2016 , 31 dec 2017| 31 dec 2016 | +100 basic points (438.9) | (93.2) , (522.2) | (198.2) -100 basis points 419.3 | 23.1 , 509.7 | 139.4

(b) LTRFDR (1) 31 dec 2017 | 31 dec 2016 , 31 dec 2017 | 31 dec 2016 +10 basis points 43.9 | 17.6 43.7 | 17.6 -10 basis points (46.7) | (18.9) (46.7) | (18.9)

(c) Foreign Currency 31 dec 2017 | 31 dec 2016 , 31 dec 2017 | 31 dec 2016 5% increase in market value 108.9 | 24.3 | 187.0 | 90.8 of foreign currency denominated assets

5% decrease in market value (108.9) | (24.3) | (187.0) | (90.8) of foreign currency denominated assets

(d) Equity 31 dec 2017 | 31 dec 2016 , 31 dec 2017 | 31 dec 2016 20% increase in market indices: - STI 218.9 | 17.5 317.7 | 99.8 -KLCI 3.2 | 0.5 42.6 | 12.3 ,

20% decrease in market indices: -STI (218.9) | (17.5) (317.7) | (99.8) -KLCI (3.2) | (0.5) | (42.6) | (12.3) (e) Credit 31 dec 2017 | 31 dec 2016 ,31 dec 2017 | 31 dec 2016 Spread + 100 basis points (569.8) | (277.6) (632.5) | (341.9) Spread - 100 basis points 654.5 | 328.2 721.5 | 397.4 (f) Alternative Investments(2) 31 dec 2017 | 31 dec 2016 , 31 dec 2017 | 31 dec 2016 10% increase in market value 52.7 | 21.4 58.4 | 43.9 of all alternative investments 10% decrease in market value of (52.7) | (21.4) (58.4) | (43.9) of all alternative investments (1) LTRFDR refersmLong Term Risk-Free Discount Rate formulated under Singapore regulations governed by Monetary Authority of Singapore. (2) Alternative Investments companies, investments in real estate, private equity, infrastructure and hedge funds The method for deriving sensitivity information and significant variables did not change from the previous year