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Tutorial 7

# Tutorial 7 - FIN 3220A Actuarial Models I Tutorial 7 30...

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FIN 3220A Actuarial Models I Tutorial 7 30 November 2005 1. μ(x) = 0.04 when x < 45, and μ(x) = 0.05 otherwise. Find the 75-th percentile of the future lifetime of (25). 2. It is estimated that an impact of a medical breakthrough will be an increase of 4 years in the complete expectation of life of (30). Prior to the medical breakthrough, s(x) followed de Moivre’s law with ω = 100. Assuming de Moivre’s law still applies after the medical breakthrough, calculate the new limiting age. 3. For a select and ultimate mortality table with a 3-year select period: (i) (ii) Mitch was a newly selected life at age 60. (iii) Assume that deaths are spread uniformly over each year of age in both the select and ultimate portions of the above table At age 61, calculate how much of the next 5-years that Mitch expects to survive? 4. (40) wins a lottery and can choose between two options which are actuarially equivalent at i = 0.05. Option 1: A payment of 1,000,000 at the time of winning.

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