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Hi sir
When calculating the premium payable based on pv of excess annual return to infinity, why isn’t growth taken into account?
Eg why isn’t the PV actually 159.3(1+g)/Re-g ?If we were looking at future flows then we would (assuming there was growth).
However here it says specifically to calculate the present value of the average excess over the last three years – there is no mention of bringing in growth at all.
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