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Beginning of Examination : P P P P P P
Beginning of Examination : P P P P P P
1. A select and ultimate survival model has a 3-year select period, and is specified as
follows:
(i) The ultimate part of the model follows the Illustrative Life Table.
px 1 lyean
5 years z years
px px 5 px 1 1
px 3 px 2 2
Lean
)zqq7#
Calculate 4 q 45 . =
10000=98410.36+10.0158967
100000
445 ]
-
+1=1000004-944
)±
00278
(A) 0.0125 100000
£4
.
5)
=
-00344
-59,937-8.96-00431
(B) 0.0135
l@⇒
(C) 0.0145
laissez
'
997224 -
quid
✓ (D) -0.0155 99378.9611 98950.63
lu5I+3= face
-
(E) 0.0165
qqy
98950.6311 )
lusty
-598410.36
-
.
00546
off
50.6
2q
.
so
10.3846T
'
(D) 0.380 2 6- =
qso
=
✓ (E) -0.385
A life annuity of F per year, payable at the beginning of each year while at
least one is alive.
A lump sum of 100,000 if both lives survive 5 years.
(ii) i 0.06
(iv) The actuarial present values of the payments under the two options are
equal.
Calculate F. F
'
ciao
= 100000×5 SPGS : as
✓
(A)
(B)
3560
-4830
F( -
oiasias
47.8552
) Lajas
=
100000406554653434.5¥
9.8969
(C) 6460
(D) 7340 F =
57628.18405
#
F(4827=7#
(E) 9820
(i) i 0.05
ftp.t#=A5Y'-.sE5oAdsMti5E5o
[1/0.52652073]
12
(iii) 1000 A 50 189
A
12
(iv) 1000 A 65 354 4622.354 f.462
189
-
.
12
Calculate a50:15 . =
l-A€o?# = 0.487452
£
"
(A) 9.6
(B) 9.9
(C) 10.2
✓ (D) 0 10.5
(E) 10.8
(iii)
f (k , k 1),
f (0,1) f (1, 2) f (2,3) f (3, 4)
k 4,5, 6,...
0.04 0.045 0.05 0.055 0.06
+
(A) 341
=P
matter , but
(iv) i 0.04 shouldnt
watch forth 10 year
-
but term
µ
.
.
Calculate the probability that the present value of the loss at issue is more than 75,000.
]
[
P 100000 vT4o 3144 I 75,000
(A) 0.001
-
(B) 0.006
(C) 0.011
=
p[ 100000540=78144 ]
(D) 0.016
[ vtao = 0.78144 )
✓ (E) -0.021
=P [ t.io
<
mamma ]
"
G.
287925121
(l -287925121 )
& lqg
-
=
46.287925/2 ,
287925121 )
+
lyq C.
= 9116088.372
/
l46jHf÷54 10.02116118cL
-
-1.30Gt
(vii) Premiums are calculated using the equivalence principle. 056inch :c 07
+ .
.o5G' a
Calculate G . :@
05.6.25 )
G( (6.25+3.6)*95=3
-
(A) 12,580
7.4
27.150000
.
= 3.
(B) 12,680 • .
(E) 12,980
(ii) i 6%
future lifetimes
distributed indep
.
identically
.
D have
Calculate P. J and
the time
last half
.
Jen dies
There for
(A) 4600
100000 A'at .
0.5
(B) @ 5200
50000 ( 2 (-60917--7228)=24770
(C) 7600 APVFB
=
{r
-575¥ ( 4.75725)
2477%
(D) 8600 =P I =P
APRFP Points
=
#
(E) 10100
Pt ,astr54 = 15206.78¥
You are given the following profit test assumptions and results:
(A) 4024
P= 4724.078392mg
(B) - 4724
(C) 5424
(D) 6124
(E) 6824
:
0 1
oo 000 50000
Dead Dead
2 3
x
00
a
x A01
x A 02
x A 03
x A 13
x
← of
a9tgtete1matths.PCaaiy-loooooAaoo2t5ooooAwolt5ooooAio3@P-5lk0Y.ab9E1469s.I
Calculate P.
(A) 4300
(B) 4700
(C) 5100
(D) 5500
(E) 5900
(iii) i 0.06
Calculate the probability that the insurance company will make a profit on this policy.
<
✓
(C) 0.607
0.261083744 ]
(
k55+
1
(E) 0.683
hl£71ln( ] i. or 's
P[
7
14-5+1
23.04683765 ]
P [ 1<55 722.04683765 ]
=p [ Kss ± 23 ]
7%55=(0-524294975)
=L
(i) The death benefit is paid at the end of the year of death.
(v) i = 0.06
APVFB = 100000µA %
-
soeyottaotzofyo )
. 46812/1 2¥40
-
)
(A) 2413
(E) 2463
(ii) Annual premiums of 10,000 are paid at the beginning of each policy year.
(iii) Expense charges, payable at the beginning of each year, are 120 plus 5%
of premium.
(v) ic iq 0.04
500000
-
AY ,
a
Calculate the Additional Death Benefit for this policy at the end of policy year 11.
(A)
@
427,390 A .v , ,=
(6600+100001957.120-5000004.4800*1
6
- v.
Yjoo ( Hi )
(B) 429,490
(D) 433,390
71519.2µs
(E) 434,990 ADB "
= 1427391.675¥
(iii) i 0.06
4=9149383.397
l45 .
45.4=4256 .lyj9
(iv) The force of mortality is constant between integer ages.
if 3489 )¢tiT4
Vt
=
1000000 . 4845
(A) 15,630
(B) 15,780
+
.4Pu5€.4✓ )
(C) 15,930 |o✓ =
1000000 Ads
:p
.
-
3489£45 :
in
(E) € 16,230 =
13851.56206 → ( × )
998399441 E)
P45= 145.4445
→
4
= .
io .yV=Tfl622988388
(ii) 60 0.013
(iii) 0.04
1000004.025
(
18700
) @B)
¥223.63
d ) -
(18704+27001.95)
-
Calculate t V at t 10. = .
04
dt
(A) 2148
✓g 2224
(B)
(C) 2256
(D) 2314
(E) 2391
(ii) i 0.06
(vi) V FPT is the Full Preliminary Term (FPT) reserve at the end of year 20.
20
-41.8138-67350
Calculate 20V 20 V FPT . = iooo
( -
f
9¥57 -
Ct -
9iF÷y ))
(A) 12
old
ZOVFPT =
,q✓ on
a 41
year
(B) 13
(C) 14
(D) 15
(E) 16
(ii) The death benefit is paid at the end of the ½-year of death.
(iv) i 0.05
(vii) The gross premium reserve at duration 10.5, immediately before the
premium payment, is 10.5V g 16,074.
Calculate the gross premium reserve at the end of the 11th policy year, 11V g .
(16074+9001.9) )
"
100000.5855 .s
2
1.05 =
(A) g16,930
(B) 16,980
+
.
51755.5 ,
,V8
(C) 17,010
lss ¢tl → ( x )
7/2=8602148
=
(D) 17,220 .
,
(E) 17,320
nV8=/l6927.o9l3T_
Healthy Sick
0 1
Dead
2
02 12
(i) x 5 x 5 0.0020
(ii) At t 5,
d
dt
00
t px = 0.0030.to/8=.5pY..oo2-sPx00..0o2=sPitmxI.spioCpixistpxI )
Axis )
d 01
(iii) At t 5, t px 0.0012 =
spirits - sPx" ( pull #
+
dt
⇐it Haiti
⇒
(A) 0.05
(B) 0.10
(C) 0.15
(D) 0.20
(E) 0.25
(i) The annual benefit payable as a life annuity-due is 2% of the 3-year final
average salary per year of service. 02.30
. (562+563+564) ↳
.
(iv) At the start of each of the last three years of employment, Mark’s salary
increased by 3%. Say Scez 100000/1.032
=
1000004 ,oz =
=
=
Calculate the annual payment he will receive using the equivalence principle.
576686.3644 µ .
(A) 52,400
68805925=153956.134680
(B) 52,800
(C) 53,200
(D) 53,600
(E) 54,000
10,000 for each full year of service on death in service between ages 64 and 65.
15,000 for each full year of service on death in service between ages 65 and 66.
(ii) Decrements for this pension plan follow the Illustrative Service Table.
(iii) i 0.05
Calculate the normal cost for this benefit for a new employee who is age 50.
✓ PM ✓
Cf Epr midyear exits
+ + ✓
=
+ + ,
t
(A) 60
,ypfo⇒
4 's
(
'
10000 o ) gay
TV
v
(B) 70 =
isPso⇐
55 ' °
(
'
15am
=
(C) 80
+ o
) v
gas
year
exits =
O we don't
pay anything
51
from to
for exits
50 .
(E) 100
7=(90-35)
lathe
"
G- 4on # v
eff
=
" '
.ie#ti5oooioF4rzaY4gon)
5 '
45,4ps , quo
"
t v
r
13ps qua
t.lv
,
=
( =
oooo clot "7
becoming
a .
.
Fmonths
problem :
we don't know the time units
forth µ .
1- P[ staying
in Oto at
7 " 2
rate 2=7 ]= / -
e-
R.v.io
I P [ exponential
.
.
=
-
=
0.753
so it seems time is to be counted in
years
.
7/12 '
2
✓
11
-
= 1 -
e = O .
lb . i
/ spot MY sps ←
"
ds
eillt
)
1
's
=
its .
.z . ds
zeioltft
's
e- do
'
= .
entered ( )
zentt
= -
( jolt )
.2t
=
2 -
e- ✓
"
/ 100006.05T It
it
1. b. ii
z( e- .
e- .2t) .1.
.
nstdt
" st
e-
'
2000%1
.
2ooo( ( III ) -
( iff ) )= 87.63324557
1C past
hse state numbers to count transitions .
PYNMLC
• ' t .
'
aet
@
inae
⇒
.
.z
.
z
-
1 is 2
ld spo°°+ gpo02
1 stpo .ph?s.tpFdt
"
)(
as
e- +
lbi
part
+
¥2 Est )
' t
=/ (
"
spirit e-
"
,→Ps It
tpo
.
1) ei2(
5 t
)
5z(
.
25
f. It
at
e- it
'
+
e- .
e- .
Id)
5
)
lt
its '
e. It
'
e-
+
.2e -
0.4773
.
if ))
( .÷C.
(5)
its (
.
'
t.si -
-
-
w )
2
200000=11
a
Exit
nay ,
,
tastiest
I Ex I
Ixy 15.5
-
= + =
×g y
tftx the
5
= +
train -
= i.
✓
12903.22581 12900
×
= 20000%5.5 = a
use
12903
=
2b
Var ( 12903 YI ,
)= 129032 Var ( Fxg ) = 129032.4195
#
rare var ( 17¥ ) =
fz rat E.)
= 4.195
'
A' ( AI
;)
2
VMCE . )
=
× ,
-
Axy
2
( AI +
Ay Axy )2
2A×t2Ay
.
-
=
-
= 13 t .
(I -
. 21 ) -
1^23+19--35 )
= 0 .
015 /
SD .
= 12903 Fm =/
26425.786427
.
l 200000 .
75×5
xy25×2 ,×y
C .
=
+ .
t;⇒aI))X
( .25( '
= 75455 ) +
13953.48838 an
→
X=
[5×4*5]
DEATH ]
Etx
ratty
E
vtxy ,
rtxy ) =
E .
Ax ( titty An )
E[
-
1d7%ov(
= -
AIYAI
Ajax
=
Elvtxvtn ] -
-
taxi
#
'
t
innit GTDEATD -
( 7
-
=
×
y
( ,
-
AIHAIAT )
AI ,
-
"
dii )
car ( a
#
.at#=e/foI)ItfI))-axyaxu=EffFHkr
)]
"
-
ixlaxtarixd
t
EC ÷ ]Ef¥y
"
' -
( ,
fix a- -
oixyax -
Exnaiy -
Ex }
y
=
tax . Ex )( aim -
Eu)
,
Zdiii )
Eat
Var ( .75X
.25Xa*p)
Ea
752×2 Van ( ) + 752×2 Van ( ) + 2. 75.25×2
Corley Ea )
Egg
=
. ,
4.252×2 C. 352 )
752×2 F otaz 21 -
4.19
.
=
.
.
t.IE ) )
+275.25×2
( f.IE t.tt#ljd
.
¥847222
.
33831.01519
1/25.87847222
2.359375+1.519097222+2
)
=
X2(
S .
D .
=
X
}
-1.326+400+45%75
"
Going
=
10001775+5004-5-1.08 Gaps
t
662.4*75=1000
'=Ap ,
500A +400
G( .
92 .ci#s-.32)= (662.46+45) 'd post ,→
5l05.74+Z95.745t4= = 5801.4-8382
G= 6.31964
6. 31964
920 ✓
G= 918.0085923 a
9183
use
,r=(36IT
b)
qastilfts
(9/866)-400-441.06=4000+5001
qtatotpta
¥9.6587
(36.50+9181.92)-441.06=(2000+500)
ZV
=
1000 ✓
of # EH8.FI
3d 10001775
48.7Gt vp Pinza
=
662.46 'd
=
75
4780.97382-48.76
p=
' '
( l -
÷
-05169 ) (
6.ge/qD=76lil6~r76oVwseF6I
3. e)
,
✓ = 0 always .
✓
Ptt
But way
1000
vqzs
.
1.06=1000
fast i
any ,
(0+761)
|iv=J 1.06 = 2000
1735.24J
ZVI
qa at 2✓ Pace
the
offset initial expenses ,
which improves
policy life
distribution earlier in the
profit
.
4 a
pCHi7-qqo.l0oo00_N-4263.134VPbo@263tP7CHi7-ofq1ooOo0_t.zV
Pool
8445.771848
a
zV=
845orusel844D4bCVtfC.qH-7s71.o7-1o00o0i.85iq81Prn-zp42.ll_o.2@flt.85qaDl.o
's )
aftadvidendih
Belford ( .85qq)( I -05 )
µ (
-
zfzo✓use\82# (822-63)
method
265.72M¥
also Checked PR , using
some , got
,
4C NPVC 37
-1000+265.72/1 ,
) = .
+
,
)
( 1- 85qq)( I
-2
894.9% ,
.Il
+ ,
.85qq)( 1- .o5 )
=
1188.63J
4dci7 )
265.72 =
. 3 ( Pudivpr
( 26¥72
620.015
Div = .7 ) =
620.015 =
X Ajit
x -1911.783
-
4dcii7
,vB= 911.78A 'IY -
=
620.015
AjY
B
✓ 0=632.7570844
2
=
9/1.78 -
(4263*-620,015+130006957-75) 1.07
=
100911.78 8598
.
(8446+632.76) ( I -
-8588171.95 )
=
2775.40
:#
✓
I 830
Pr
exceeds ILT
and because interest price expectation
.
on
5-
VMCL ;)
) Var( 2 by independence
a
i 2) = .
NVML
= ;
fN(
#
F)
0000-20
)fz P
Said
=
s.D.CL ) =
Eu )
=
Fu
A
*
(
Varlh ; )= (
€7
#
8D
2
# qo x2= 0.026839938 -7
Ew )
=
Var ( y
-
-
=
iooootplrjvar
(× )
a
s.D.LY
)=
) 72025
(1638.29-+3.2710)
A' 1 or Eqo = 1- 05 ( 5.595 =
.
5b
.
= -
( H )
go n
'
( 0.5456
2A qo = I - 202 Ifo =/ -
0.1 4.544
of ( a+bP ) at BP
→
oasN→oo
g-
}oo)/E=
=
-
so diversifiable .
✓
5897.84 a 5900
#:
i ) =
oooo 20.1
5898N
LI
use
I 595W
p×*=e%+M*Fd5 efotnasoids
use
,
efotmxtsds
t.at
e.
oh 594$
= ,
,p×
or -a•* =
.
of =/ ftp.Pdtfo.etrmttpxdt
D= .d4 .
=
Tlqo
5b ii
-2.05 (4-725)=0.5275
2aIP
1
1- 20
continued 2A*o*
=
=
=/
←
f
in
OT
= qo
Van ( Zqf ) =
0.027297438
var
400 5948 w .
p .
.
E[L|µ]E
( L; / Doesnt work ] = 10000 Ago
-
Boo I @
) 13005W
10000 ( tdaoo
-
=
-71
[
-
E L ; I works =
( Eftlr ]
) =
4002 ( -71-(-5397/4.671.4)
✓ air
=
4002 ( 52565.76 )
5 biii Continued
52565.76 )
Van ( L ) = 400-5918+4002 (
5. D. (2) =
91721.80112
5 c) Var ( h ) =
N .
5918 t NY 52565.76 )
with is
N policies
to
limvaymf no longer goes zew ,
but
nathuto
552565.76
5 d) the new
drug created dependence among
the
future
the block
This
entire
to the outcome
of the
business may react similarly
of
could result
in a Large change
trials which
drug ,
to the
block totals
.
604.0259
tea Finn 60404
604.0438
k¥1415165
GO
26 27
me8
01776011.02739
( 40 years )( .
=
0.68
-
604.02 )39
Oscar
#i
cooooo
9500°
645 65
67.5 64
T
in
29
has years
@oyea✓D=7)10°°• = 0.51 pm )
loooao
9.431551132
000281989697.46812
=
Gb ) 0
9.5617 1.
Finn "
,
-
-
.
57.5Pa , ;)
p
C. 5)
LIAT
pay
2ham
Y9 ex )
90238456 #
(
=
46835 4.598 .
+4.362 ...
)= 1419644.1592J
a
0
thisisthetotal ,
has
Finn
Since
6,5
"
Finn
or +
co
=
Epvofmidyeuexitstvpx ,V
in
p
0 0
if (1) 600001 )
T in
.int/v3b5m..psaiiaiIl.s7+r393gpwiaYl.5I
164.5 LGI
-
dzu
love
)
(
1020 0.404 .
. .
+ .
38326 ...
803.01
E
Co =
803.01 ( 1.06
-
'
)( 1
-
.
00122 ) .tl#.T
Gcii ) Oscat
419644.16+6
=
v. 5. spay 1.
"j?
5) 97500677129.5 )a" a
exits EPV
midyear
*
getter 224827.462
✓
+
V Pay ←
,
222461.4738
( M
C o=/27644.76⇒
6 d .
i ) Finn
will
thus the normal
cost
I .
'll be larger if
salaries are
projected ,
lay
be bk C = ✓
Prs Y
) Ota
smalls
ii
IV will be unchanged , as
will be | because
pay ✓ -
V
mid exits ✓ •
E PV
+
C year ,
.
- w
some Larger .