Question 1. If X is the curtate future lifetime of (96), calculate Var(K}), given the following life wail _@ De wage a 7% 180 SOT 130 8 73 9 49 100 0 Question 2. You are gi ( 1000(7A)s0 = 4996.75 yg Gi) 10003, 5, = 5.58 to ' ' (iii) 100045, = 249.05 (iv) ¢= 0.06 (¥) Mortality follows the Illustrative -Life-Pable-— (Ego7 TSS Calculate 1000(FA) 51 Question 3. For a select-and-ultimate mortality table with a 3-year select period: x i esa B3 600.09 11 015 68 61 0.10 o.12 016 64 62 OL 0.13 017 65 630.12 ond 018 66 64 (0.13 0.15 019 «67 ‘* Black was a nevily selected life on 01/01/2001. ‘* Black’s age on 01/01/2002 is 62. ‘© Qis the probability on 01/01/2002 that Black will die before 01/01/2006. —== Calculate Q.Question 4. For a special whole life insurance on (40), you are given: (i) The death benefit is 1000 for the first 10 years and 2500 thereafter. Gi) Death benefits are payable at the moment of death. (ii) Z is the present-value random variable. (iv) Mortality follows De Moivre’s law with w = 100. (vy) 6=0.10 hoe Calculate Pr(Z > 700). Question 5. For a special whole life insurance, you are given: @ wae, t>0 Gi) 1 is constant. Gi) 5 = 0.068 (iv) Z = e-7Y", where T is the future lifetime random variable. () E[Z] = 0.03636 Calculate Var[Z]. Question 6, An investment fund is established to provide benefits on 400 independent lives age 2. (i) On January 1, 2001 each life is issued a 10-year defereed whole life insurance of 1000, payable at the moment of death. Each life is subject to a constant force of mortality of 0.05. (li) The force of interest is 0.07. Calculate the amount needed in the investment fund on January 1, 2001, 0 thet the probability, as deter- ‘mined by the normal approximation, is 0.95 that the fund willbe suficient to provide these benefitsQuestion 7, You are given: Determine the median of the present value random variable Z =v" for a whole life policy issued to (2) Question 8. A 3-year term life insurance to (2) is defined by the following table. Yesr Benefit k deik a G21 0m ee) You are given that v = 0.9, that death benefits are payable at the end of the year of death and that the expected present vale of the death benefit is P. Calculate the probability that the present value of the benefit payment that is actually made will exceed P. Question 9. For a whole life insurance of 1000 on (2) with benefits payable at the moment of death: a0, o (An = 5073 jens 1 (ones)(pn442)(P00)0%s) = 1 (088)(0.86)(0.84)(0.88) = 0.47296 Alternative: 2 = saps = Horys4 + Worysa)(qexp+2) + (Ppsns1) Ptosp42) dea) + (Poryss) Pjor}+2)(PeA) (46s) = 0.12 (0.88)(0.14) +. (0.88)(0.86)(0.16) + (0.88)(0.86)(0.84)(0.17) = 0.47236 4, The present value random variable Z is defined as ga f Wer o 700) = Pr(L000e*2” > 700) = Pr(T < 357) After 10 years, Pr(Z > 700) = Pr(250000.17° > 700) = Pr(T' < 12.73) cad 3.57 + (12.73 ~ 10) Po(Z > M00) = PoC < 3.57) + Pr(t0-< F< 1270) = SSE RTE 19) _ 9 op ACT 3130 Actuarial Models 1 Jelfeey 8. Pai= 0.04 weera ‘Var(2Z) = B(2*) — [B(Z)) = 0.0185 — (0.03636)? = 0.0172 BZ?) = [ve ote He ydt = 4 — 0.0185, -(oors0asn0, ees a sate = ope I E(S) = 400 x 1000 x 0.1255 = 50200 Var() = 400 x 1000"[0.0304 — (0.1255) = (3075.70)? =F =50200-+ 3075.70 x 1.645 = 55259.52 soz er(oxesooso . ‘05+ on1d = 90894 7. Let m be the answer. 0.5 = Pr[Z < m] = Pr[v” < ml = Pr{—T < log(m)] = Pr{T > — lo a = sme where 2 isthe isue age and ¢ = —log(m)/6 = ~25log(m). Since (2) = €-°°%, Hence, 0.5 = ape = e- 002-254] Alternative: We have F(mn) = m/4 = mm 8. The first step is to find P, Calculate the present values and the probabilities of paying those present ‘values from the table. Remember that the sum of all 4qz"s must be 1. You should obtain the following: O26, then apy = (05) = 0.25. Year & Benefit geix Z=PV(Benelit) yas nyQe-Z 1 0 3 0.29 2.700 0.2 0.5400 2 1 2 025 1.620 0.2 0.3240 3 2 1 O50 0.729 03 0.2187 4 0 a 03 0 ‘Therefore, P = 1.0827. The values of Z which are greater that P = 1.0827 are Z = 2.7 and Z = 1.620. Hence Pr{Z > P]=0.2+0.2=04 ACT 3130 Actuarial Models 1 Jeffrey 8. Pai ww1000, = 1000f4,2 7+ 10BeAes10) = 1000 [/"eaetee oon ars ere 6 cE €-9.05g-0.074(0,07) a] = 1000 [oe feat (oore™ = = 100 po Fass" Sor], + oane [sep i 0.06 or (t~ et) 4 O07 = 1000 { ae] 1000(0.37927 + 0.21460) = 593.87 oa" FSG ACT 3130 Actuarial Models 1 Jelfroy 8. Pai