Sample Multiple Choice Questions v4.1.pdf

# For a fully discrete 5 payment whole life insurance

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For a fully discrete 5-payment whole life insurance of 1000 on (80), you are given: (i) The gross premium is 130. (ii) 80 0.01( 1), 0,1, 2, ..,5 k q k k (iii) 0.95 v (iv) 86 1000 683 A (v) 3 L is the prospective loss random variable at time 3, based on the gross premium. Calculate 3 . E L (A) 330 (B) 350 (C) 360 (D) 380 (E) 390 [This was Question 15 on the Fall 2014 Multiple Choice exam.]

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July 3, 2018 Page 96 7.23. For a fully discrete whole life insurance of 1 on ( x ), you are given: (i) 10 0.02067 x q (ii) 2 0.90703 v (iii) 11 0.52536 x A (iv) 2 11 0.30783 x A (v) k L is the prospective loss random variable at time k . Calculate 10 11 Var . Var L L (A) 1.006 (B) 1.010 (C) 1.014 (D) 1.018 (E) 1.022 [This was Question 16 on the Fall 2014 Multiple Choice exam.]
July 3, 2018 Page 97 7.24. For a fully discrete whole life insurance of 1 on ( x ), you are given: (i) The net premium reserve at the end of the first year is 0.012. (ii) 0.009 x q (iii) 0.04 i Calculate . x a (A) 17.1 (B) 17.6 (C) 18.1 (D) 18.6 (E) 19.1 [This was Question 14 on the Spring 2015 Multiple Choice exam.]

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July 3, 2018 Page 98 7.25. For a fully discrete whole life insurance of 100,000 on (40) you are given: (i) Expenses incurred at the beginning of the first year are 300 plus 50% of the first year premium. (ii) Renewal expenses, incurred at the beginning of the year, are 10% of each of the renewal premiums. (iii) Mortality follows the Standard Ultimate Life Table. (iv) 0.05 i (v) Gross premiums are calculated using the equivalence principle. Calculate the gross premium reserve for this insurance immediately after the second premium and associated renewal expenses are paid. (A) 200 (B) 340 (C) 560 (D) 720 (E) 1060 [This is a modified version of Question 1 8 on the Spring 2015 Multiple Choice exam.]