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Question 1
Under the pure premium method of ratemaking, the indicated rate per exposure unit is calculated as:
Correct Answer:
Pure premium divided by (1 minus variable expense ratio minus profit provision)
Question 2
The loss ratio method computes the indicated rate change as:
Correct Answer:
(Experience loss ratio plus fixed expense ratio) divided by target loss ratio, minus 1
Question 3
Which statement BEST describes when the loss ratio method is preferred over the pure premium method?
Correct Answer:
When exposures cannot be reliably measured but premium history is available
Question 4
An actuary computes pure premium of $250 per exposure. Variable expenses are 18%, fixed expenses per exposure are $30, and the profit and contingencies load is 5%. The indicated rate per exposure is closest to:
Correct Answer:
$$364
Question 5
For the loss ratio method, an experience period shows a loss and LAE ratio of 65%, fixed expense ratio of 8%, variable expense ratio of 20%, and target profit of 5%. The indicated rate change is closest to:
Correct Answer:
-2.7%
Question 1
Exam overview

About this Exam

Prepare with the CAS Exam 5 Practice Questions - CAS Exam 5 Basic Ratemaking and Estimating Claim Liabilities Exam practice quiz. This question bank includes 100 questions covering premium, loss, method, pure, and ratio. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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CAS Exam 5 Practice Questions - CAS Exam 5 Basic Ratemaking and Estimating Claim Liabilities Exam

This practice set contains 100 questions from the matching question bank and focuses on premium, loss, method, pure, and ratio. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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