Schweser-Vol2-Test-2-Question-7

https://www.dropbox.com/s/85vtnmvp94n69k0/Screenshot%202014-05-24%2022.28.38.png

Doubts related to liquidity and risk tolerance

1. Liquidity doubt: Since in the question they are saying that very less claims are being claimed than expected, should we not have our liquidity needs to be low. Text says we should have high liquidity

2. Risk tolerance doubt: For life and non life insurance companies, should we list ability and willingness separate? In the question since we are expecting claims to be low can we expect our ability to be higher? Text answer says low