This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: ACTL 1001 Actuarial Studies and Commerce Class Test 1 Tuesday, 28th August 2007 Sample Solutions 1. [8 marks] Assume that the probability that the number of hailstorms occurring in a year has a Poisson distribution with = 0 . 2 . What is the probability that in a 50 year period there will be at least 2 years with a hailstorm? Probability of a hailstorm in any year is . 2 e . 2 = 0 . 16374615 Probability of at least 2 years with a hailstorm in 50 year period is 1 (1 . 1637) 50 50 (0 . 1637) (1 . 1637) 49 = 0 . 9986 2. [14 marks] Given that the interest rate if 8%p.a. (compounded semiannually) , calculate the following: a. [4 marks] effective annual rate b. [5 marks] the equivalent annual rate of interest, payable monthly c. [5 marks] the value of an 5 year annuitydue with payments of $ 3 per annum. (a) j = 1 + . 08 2 2 1 = 0 . 0816 (b) 1 + j (12) 12 12 = 1 + . 08 2 2 j (12) = 0 . 078698362 hence 7.8699% p.a (monthly compounding) (c) 3 .....
View
Full
Document
This note was uploaded on 08/23/2010 for the course ACTL 1001 taught by Professor Bernartwong during the Three '10 term at University of New South Wales.
 Three '10
 BernartWong

Click to edit the document details