Sample Multiple Choice Questions v4.1.pdf

For two fully continuous whole life insurance

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For two fully continuous whole life insurance policies on ( x ), you are given: (i) Death Benefit Annual Premium Rate Variance of the Present Value of Future Loss at t Policy A 1 0.10 0.455 Policy B 2 0.16 - (ii) 0.06 Calculate the variance of the present value of future loss at t for Policy B. (A) 0.9 (B) 1.4 (C) 2.0 (D) 2.9 (E) 3.4 [This was Question 12 on the Spring 2014 Multiple Choice exam.]
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July 3, 2018 Page 90 7.17. For a special fully discrete 25-year endowment insurance on (44), you are given: (i) The death benefit is 26 k for death in year , k for 1,2,3 25 k . (ii) The endowment benefit in year 25 is 1. (iii) 55 0.15 q (iv) 0.04 i (v) 11 , V the net premium reserve at the end of year 11, is 5.00. (vi) 24 , V the net premium reserve at the end of year 24, is 0.60. Calculate 12 , V the net premium reserve at end of year 12. (A) 3.63 (B) 3.74 (C) 3.88 (D) 3.98 (E) 4.09 [This was Question 13 on the Spring 2014 Multiple Choice exam.]
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July 3, 2018 Page 91 7.18. For a fully discrete 30-year endowment insurance of 1000 on (40), you are given: (i) Mortality follows the Standard Ultimate Life Table. (ii) 0.05 i Calculate the full preliminary term (FPT) reserve for this policy at the end of year 10. (A) 180 (B) 185 (C) 190 (D) 195 (E) 200 [This is a modified version of Question 14 on the Spring 2014 Multiple Choice exam.]
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July 3, 2018 Page 92 7.19. Your company issues whole life annuities to a group of lives age 70. For each policy, you are given: (i) The annuity pays 2000 at the end of each year. (ii) The single gross premium is 26,600. (iii) Profits are based on gross premium reserves. (iv) The gross premium reserve at the end of year 10 is 8929.18 per policy. (v) Expenses are paid at the end of each year for any policyholder who does not die during the year. During year 11, anticipated and actual experience are as follows: (a) Anticipated Actual Mortality 80 0.11 q 200 deaths Interest 0.03 i 0.04 i Expenses 30 per policy 35 per policy (b) 1000 such policies are in force at the beginning of year 11. For year 11, you calculate the gain due to interest prior to calculating the gain from other sources. Calculate the gain due to interest during year 11. (A) 87,560 (B) 87,902 (C) 88,435 (D) 88,880 (E) 89,292 [This was Question 15 on the Spring 2014 Multiple Choice exam.]
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July 3, 2018 Page 93 7.20. For a fully discrete whole life insurance of 100,000 on (45), you are given: (i) The gross premium reserve at duration 5 is 5500 and at duration 6 is 7100. (ii) 50 0.009 q (iii) 0.05 i (iv) Renewal expenses at the start of each year are 50 plus 4% of the gross premium. (v) Claim expenses are 200. Calculate the gross premium. (A) 2200 (B) 2250 (C) 2300 (D) 2350 (E) 2400 [This was Question 13 on the Fall 2014 Multiple Choice exam.]
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July 3, 2018 Page 94 7.21. For a fully discrete whole life insurance of 100 on ( x ), you are given: (i) 15 0.10 x q (ii) Deaths are uniformly distributed over each year of age. (iii) 0.05 i (iv) t V denotes the net premium reserve at time t . (v) 16 49.78 V Calculate 15.6 . V (A) 49.7 (B) 50.0 (C) 50.3 (D) 50.6 (E) 50.9 [This is a modified version of Question 14 on the Fall 2014 Multiple Choice exam.]
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July 3, 2018 Page 95 7.22.
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