From: Ronald Raygun 
Subject: Re: Endowment Compensation - Which interest rates to use in compensation calc?
Newsgroups: uk.finance
Date: Wed, 26 May 2004 21:24:30 GMT

Tim wrote:

> "Ronald Raygun" wrote
>> Perhaps they should be made to let you provide your actual
>> rate history, and to do the calculation twice, once with their
>> rates and once with yours, and pick whichever gives you more.
> 
> Surely the option for using their standard rates is there because it may
> be difficult to obtain, or calculate, using the actual rates.

That's one reason, but the cynic in me won't believe it's the only one.

> Your suggestion to do *both* calculations assumes that the actual rates
> *are* available, and that it *is* possible to produce the calculation
> using them.

Indeed it does.

> In that case, there should be no need (and indeed no option) to use
> standard rates - everyone should have their reviews performed with the
> "correct" *actual* rates.

The way the story was presented was that the customer was given the
choice before it had even been established whether the actual data were
available.  Obviously if they were not, the choice would be removed and
the standard rates would have to be used.

> Bearing in mind that "actual rate" data had been obtained, and a
> calculation had been performed using these - what, do you think, would be
> the purpose of then *also* using standard rates for a similar
> calculation??

To determine which set is more beneficial to he customer, of course.
Silly question.

I mean, if asked "Do you want us to use your data or our data?", what
should one answer?  "Er, er, I don't know, you choose." or "Sorry, I
have no data, so I guess we'll use yours" or "Hang on a sec while I
toss this coin" or "Well, what *are* your data?  Let me see.  Hmm, yes,
OK, let me get back to you in a couple of days.     Hello?  It's me.
You know, the rates data?  Yes, I've decided.  Let's use mine!" but the
most likely first reaction would surely be "Er, why do you ask?  What
difference does it make?", to which the company can hardly answer
"Well, you may get more money with one than the other, but we won't
help you guess which is which.", can it?