Math 472 HW 10 Solutions - MATH 472/567: Actuarial Theory...

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Homework #10: Spring 2011 Assigned April 13, due April 20 1. Consider independent lives (25) and (50), each with mortality that follows de Moivre’s Law with limiting age 100. Calculate: (a) 25 q 1 25:50 . (0.25) (b) 25 q 2 25:50 . (0.0833) 2. Using the setup in Problem 1 above, and further assuming δ = 0.05, calculate the actuarial present value of a life insurance that pays 1 at the moment of death of (25) if (25) is the second to die. (0.0916) 3. For a special last-survivor insurance of 10,000 on (x) and (y): (i) The death benefit is payable at the moment of the second death. (ii) Level annual benefit premiums are payable continuously each year at a rate of π per year while both (x) and (y) are alive. (iii) The independent random variables T * ( x ), T * ( y ), and Z are components of the common shock model. Each are exponentially distributed with forces of mortality equal to 0.03, 0.05, and 0.01, respectively. (iv)
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This note was uploaded on 05/18/2011 for the course MATH 472 taught by Professor Zhu during the Spring '08 term at University of Illinois, Urbana Champaign.

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Math 472 HW 10 Solutions - MATH 472/567: Actuarial Theory...

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