ACT348F  TERM TEST 1  OCTOBER 6, 2004
Print your name and student number clearly on each page
Do all work on this question paper, with work for question 1 on this page (use both sides if
necessary), work for question 2 on the next page, etc.
All calculations should be done to at least 6
digit accuracy
.
Answers are expected to have at least 4 digit accuracy.
THIS IS A CLOSED BOOK TEST  NO BOOKS OR NOTES ARE ALLOWED.
A calculator may be used
1.
A 4year fully discrete endowment insurance has death benefit equal to 1000 and the
endowment (survivor) benefit is equal to 2000.
The policy is issued at age
(premiums
B
are scheduled for the lifetime of the policy).
The effective annual interest rate is
3œ !
2 %, and the mortality probabilities are
; œ Þ#& ß ;
œ Þ#& ß ;
œ Þ&! ß ;
œ Þ&!
B
B"
B#
B$
.
The level equivalence principle annual premium is
.
T œ $#$Þ&#
5
(a)
Formulate the 2nd year terminal prospective loss random variable (conditional
distribution).
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 Fall '04
 Broverman
 Endowment policy, B, ÞÞ

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