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  3. Deterministic Modelling

Why do I only need to enter the 'Medium estimate' for Deterministic Modelling?

We have built the tool with some simple assumptions based on the FCA handbook, which states that the lower and higher estimates for the asset class returns must maintain a 3% differential to the medium estimate. (FCA Handbook COBS 13 Annex 2 Projections)

Once the 'Medium estimate' is added, the low and high estimates will get automatically added.  An example is:

Asset class - if 6% is added for the 'Medium estimate' then the low will be automatically set to 3% and the high will be set to 9%.

We have followed this approach for the Inflation and yields section using the differentials that are shown in the above mentioned Annex.