# test1_03 - ACT348F TERM TEST 1 Print your name and student...

This preview shows pages 1–2. Sign up to view the full content.

ACT348F - TERM TEST 1 - OCTOBER 18, 2003 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 4-year fully discrete term insurance with face amount 1000 is issued at age B (premiums are scheduled for the lifetime of the policy). The effective annual interest rate is 25%, and the mortality probabilities are ; œ Þ#! ß ; œ Þ#& ß ; œ Þ%! ß ; œ Þ&! B B" B# B\$ . The equivalence principle annual premium is . "!!!T œ #"*Þ%& BÀ%l " 3 (a) Formulate the 2nd year terminal prospective loss random variable (conditional distribution). 2 (b) Find the 2nd year terminal benefit reserve as the expected value of the loss random variable in part (a). 4 (c) Write the prospective form of the 2nd year terminal benefit reserve , "!!! Z # BÀ%l " and calculate it by calculating each of the factors in the expression (the premium is given above).

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 3

test1_03 - ACT348F TERM TEST 1 Print your name and student...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online