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A single premium 10-year term life insurance policy with benefits payable at the end of the year

of death is issued to (30). You are given:

(i) Mortality follows the Illustrative Life Table.

(ii) i = 0.06

(iii) Sales commissions are 18% of expenses-loaded premium

(iv) Taxes are 2% of expense-loaded premium

(v) Per policy expenses

First year = 40

Renewal = 5 per year

Calculate the policy fee that should be charged.

A. 9.00

B. 11.90

C. 73.75

D. 79.30

E. 92.15

**2. For a life table with a one-year select period, you are given:
**

◦

x ![x] d[x] !x+1 e[x]

80 1000 90

- 8.5

(i)

81 920 90

82 850 90

(ii) Deaths are uniformly distributed over each year of age.

◦

Calculate e[82].

A. 7.9

B. 8.0

C. 8.1

D. 8.2

E. 8.3

8.836842

7.86

7.736842

**3. You are given the following information for a person aged x:
**

(1)

(i) µx (t) = 0.05 for 0 ≤ t

(2)

(ii) µx (t) =

1

for 0 ≤ t < 20

20 − t

**where the index (1) indicated death due to accidental causes and the index (2) indicates death
**

due to non-accidental causes.

Determine the probability that (x) will die due to accidental causes.

A. e−1

B. 1 − e−1

C. e−1.5

D. 1 − e−1.5

E. e−2

A.103 D.113 E.083 B.4. 0.123 . (iii) Ted’s force of mortality function is µ(y) = 3 100−x . You are given: (i) Bill and Ted are both age 30.093 C. 0. 0. 0. 0. (ii) Bill’s force of mortality function is µ(x) = 4 100−x . Find the probability that Bill dies within 10 years and after Ted.

(v) The annual effective rate of interest is i. Which of the following is an expression for the tth terminal reserve for this special policy? A. P st − t−1 ! qx+h (bh − h V ) (1 + i)t−h C. (ii) The death benefit paid at the end of the hth year is bh . P s¨t − t−1 ! vqx+h (bh+1 − h+1 V ) (1 + i)t−h h=0 h=0 h=0 h=0 h=0 . P s¨t − t−1 ! qx+h (bh − h V ) (1 + i)t−h B. (iv) The level benefit premium paid at the beginning of each year is P . P s¨t − t ! vqx+h (bh+1 − h+1 V ) (1 + i)t−h D. (iii) The terminal reserve at time h is Vh+1 .5. P st − t ! vqx+h (bh+1 − h+1 V ) (1 + i)t−h E. For a special fully-discrete whole life whole life insurance issued to a (x) you are given: (i) The death benefit is paid at the end of the year of death.

are as follows: First Year Renewal Years Percentage of premium 20% 6% Per policy 8 2 (iii) The annual contract premium is equal to 314.50 (d) qx+k 0. 257 B. 452 . 415 D.54 0.08 0.62 0.50 (w) qx+k 0.29 0.09 0.38 0.6. 326 C. (iv) The following double-decrement table: k 0 1 2 (τ ) px+k 0. you are given: (i) i = 0.00 (v) The following table of cash values and asset shares: k 0 1 k+1 CV k AS 247 571 0 - Calculate 2AS.10 (ii) Expenses. 423 E. For fully discrete 3-year endowment insurance of 1000 on (x). which occur at the beginning of the policy year. A.

7.898 (iv) 2 3 3.992 E. 2.892 D.009 (ii) qx+1 = 0.000 Determine 3 2Vx:3 . You are given: (i) qx = 0. 1.792 C.834 k 3 k Vx:3 1 0.092 . A. 1. 1. The random variable k L is the prospective loss at time k for a fully discrete 3-year endowment insurance of 3 on (x).011 (iii) The premium is 3Px:3 = 0. 1.692 B.

06 Calculate the actuarial present value of this insurance. 0.216 C.8. T ∗ (x) (iii) T ∗(x) has an exponential distribution with µx ∗ (iv) T (y) has an exponential distribution with (t) = 0.03.326 . the common shock random variable. 0. 0. 0.271 D.05. (ii) The independent random variables T ∗(x).303 E. t ≥ 0 (vi) δ = 0. T ∗(y). A. 0. For a last-survivor 20-year term insurance of 1000 on (x) and (y) you are given: (i) The death benefit is payable at the moment of the second death if the second death occurs during the next 20 years. t ≥ 0 T ∗ (y) µy (t) = 0. has an exponential distribution with µZ (t) = 0. t ≥ 0 (v) Z.02. and Z are the components of a common shock model.198 B.

(ii) For partial years all decrements are uniformly distributed in the multiple-decrement table.00164 E. 0. 0.00154 D.00144 C. 0.00174 .00134 B. You are given the following forms of decrement: (d) death (w) withdrawal (i) early retirement (r) normal retirement You are also given: (i) Decrements follow the Illustrative Service Table.9. (d) Calculate q &35 . 0. A. 0.

0.25 . You are given: 2x for 0 ≤ x < 100 10.15 D. 0. 0.20 E. 0.000 − x2 Determine the probability that a life aged 30 dies between ages 40 and 50.05 B.10 C. 0. 10|10q30 .10. µ(x) = A.

0.11. The total dental claims for an insured are classifed each year as full (F).20 E.21 .19 D. 0. 0. 0. The transition from year to year is as follows Given that an insured has no claims in 2009.18 C. 0.17 B. partial (P) or no claims (N). what is the probability of no claims in 2012? A.

8 emails per day. For a given day. 50% of all his emails are MLC-related. 2:25 am C. starting at midnight. 2:35 am E. 2:40 am . 2:20 am B.12. 2:30 am D. which arrive according to a Poisson process. what is the median time until James receives his first MLC-related email for the day? A. On average James Washer receives 13.

For a 20-year endowment insurance of 100 on (40) with death benefit payable at the end of the year of death. you are given: (i) i = 6% (ii) Mortality follows the Illustrative Life Table. 72 C. (iii) Z is the present value random variable for this insurance. 183 E.13. 106 D. A. 48 B. Calculate Var(Z). 299 .

5. You decide to advise her to take the option with the largest actuarial present value. You make the following assumptions: (i) i = 6% (ii) Amy just turned 41 today. A lump-sum of $500.000. 2 C. Which option do you advise your friend to take? A. 4 E. 3 D.000 today. Your friend is not an actuary and turns to you for help.000. but no less than 10 payments.000 today and another lump-sum of $1.000 at the beginning of each year for the rest of her life starting today. 3. 5 . won the lottery and is given 5 options for her winnings: 1.14. A lump-sum of $1. $70.000 in 20 years if she is still alive.000 at the beginning of each year for the rest of her life starting today.000 at the beginning of each year for the rest of her life starting today. but no more than 10 payments. $50. (iii) Amy’s mortality follows the Illustrative Life Table. $150. 1 B. Amy. 4. Your best friend. 2.

0. 0.0110 E. Using the normal approximation. 0. 0. (iii) i = 0.0102 D. you are given: (i) The future lifetimes are independent.0091 B. A.000 lives age 60. (ii) Mortality follows the Illustrative Life Table.15.0118 .06 (iv) $3380 is the premium for each insurance of $100.0096 C. 0. calculate the probability of a positive total loss.000 on each of 10.000. For a fully discrete whole life insurance of $100.

0.01 C. A.04 (ii) δ = 0. 0.04 . 0. 0. ! " T (30:40) T (30:40) Calculate Cov v .03 E. You are given the following: (i) µ(x) = 0.00 B.06 (iii) Two lives (30) and (40) are independent. 0.02 D.v .16.

396 . (ii) i = 0. 366 C. A.06 Calculate 1000 (10V30:20 ) . You are given the following: (i) Mortality follows the Illustrative Life Table.17. 356 B. 386 E. 376 D.

18.28 D. 5. 5.48 .2. 5. If it didn’t rain on a given day then the probability that rains the next day is 0. Given that it rained today. 5. Rainfall is modeled by a homogeneous Markov Chain. 5.08 B.7. If it rained on a given day then the prob that it rains the next day is 0.38 E. When it rains the total rainfall for the day is always 2 inches of rain. what is the variance of the total rainfall for the next 3 days? A.18 C.

02 (iv) The force of mortality for death from all other causes.315 C.765 E.015 (v) The force of interest. You are given: (i) The lump sum payment is $50.690 D. A. $6.000 if the death occurs within the next 20 years.700 . in addition to disability benefits. (ii) Otherwise. (iii) The force of mortality for death as a result of the disease.630 B. the lump sum payment is $25. The workers compensation laws of state X specify that. A worker has become disabled as a result of an occupational disease.19. $11. µ(2) = 0. $10. δ = 0. $10. the worker’s estate will receive a lump sum payment at the time of her death if the worker dies as a result of the occupational disease. µ(1) = 0.000.05 Determine the actuarial present value of this death benefit. $18.

4. 0.3 E. 2. You are given: ◦ (i) e30 is the expected future lifetime for (30) under the assumption of constant force with µ = 0.0 B.10 and a uniform distribution of deaths for partial years is assumed.20.3 . 8. "◦& # ◦ Calculate 1000 e 30− e30 . ◦& (ii) e 30 is the expected future lifetime for (30) if a life table is constructed at annual points in time using a constant force of mortality model with µ = 0.10.3 D.3 C. 6. A.

14.31 1 Calculate 1000A30:10 .05 1 (iii) 1000A32:8 = 13.95 . 14. (ii) i = 0.50 D. 14. You are given: (i) Mortality follows the Illustrative Life Table. 14.35 C.75 E. 14.21. A.20 B.

22. where 2a¯x is based on the force of interest 2δ? % 1$ a¯x − 2a¯x − a¯2x δ % 2$ 2 B. a¯x − a¯x − a¯2x δ %2 1$ 2 C. Which of the following expressions equals Var (¯aT ). a¯x − a¯x − a¯2x δ %2 2$ 2 D. a¯x − a¯x − a¯2x δ %2 1$ 2 E. . a¯x − a¯x − a¯x δ A.

1 (iv) Px+n = 0.4 (iii) Px = 0.08 E. 0. 0.23.07 D.05 B. 0.6 (ii) n|Ax = 0. You are given: (i) Ax = 0. 0.06 C. A.09 . 0.2 1 Calculate P x:n .

2 0.1 0.0 0. (vi) d = 0. You are given then following: (i) Transitions happen at the end of each year. 155 . (iv) If the insured is disabled at the start of a year then the premium is waived and the insurance company pays the amount of the benefit premium to the insured.8 0. A. 140 C.24. The status of an insured can be classified as one of three states: Healthy (1).05% (vii) The one-year transition matrix between states is 0.7 0. (v) Policies are only issued to people currently in state #1. (iii) Benefit premiums of P are paid by the insured at the beginning of every year if in State #1.0 1.0 Using the equivalence principle calculate P for a 3-year term insurance policy.2 0. (ii) A death benefit of $1000 is paid at the end of the year in which the insured transitions to #3 from either #1 or #2. 150 E. Disabled (2) or Dead (3).0 0. 135 B. 145 D.

75 .0.49 174.

7 12 E. 5 12 D. You are given two independent lives (x) and (y) and the following information: (i) x = 20 (ii) y = 40 (iii) The lifetimes of (x) and (y) follow DeMoivre’s law. 1 4 C. with ω = 100. 1 12 B. Calculate the probability that exactly one life will survive for at least 20 years. A.25. 3 4 .

6 C. A.6 . 8.6 E. You are given the following information about a triple decrement insurance model: (i) µ(1)(x) = 1 80−x for x < 80 (ii) µ(2)(x) = 2 80−x for x < 80 (iii) µ(3)(x) = 3 80−x for x < 80 (iv) i = 0 Calculate the actuarial present value of a continuous 10 year temporary annuity that pays 1 per year as long as no decrement has occurred issued to a life age 30. 4. 5. 7.26. 6.6 D.6 B.

Assume a month is 30 days. but their variance is half of the Fool’s variance. Fools can expect to lose $100 with variance $1000. Find the standard deviation of Henry’s profit for any given month. $2670 D. $2780 .27. Harry the Hustler runs a 3 card monte game on a street corner in New York City. $2610 C. $2730 E. A. Players arrive according to a Poisson process at a rate of 10 per day. Half of the players arriving are Fools and the other half are Suckers. The police show up 20% of the time. but only stop the Suckers from playing since a Fool and his money are soon parted anyways. $2550 B. Suckers can expect to lose twice as much as Fools.

0.013 D. 0.03 A¯x C. You are given the following: 40 0.40 0.02 20 ¯ 5 V $ % ¯ A40 .14 .040 0. 0.020 0. B.015 $ % ¯ P A¯x 20 45 0.28.15 $ % ¯ P A¯x 15 0.07 E.018 60 0.039 x Calculate A.20 0. 0. 0.05 0.

Not enough information .29. 1 + δ B. ln(1 + δ) 1 C. For a population of individuals age x. you are given: (i) Each individual has a constant force of mortality. at $ a% rate of 1 per year. Calculate the actuarial present value of a continuously increasing. A. continuous whole life annuity drawn at random from this population. (iii) The constant force of interest is δ. I¯a¯ x. δ(1 + δ) & 1 D. ln δ(1 + δ) ' E. (ii) The forces of mortality are uniformly distributed over the interval (0.1).

She has two choices . Once she switches to cheap wine she will never order expensive wine again. What is the probability that she has a 3rd glass of wine and it is cheap? A.47 C.cheap and expensive.45 B. 0. This probability will double after each glass of wine she drinks. 0. 0. Since she is celebrating she decides her first glass will be the expensive wine.53 . 0. After her first glass there is an 80% chance she will order the expensive wine again for her 2nd glass (assuming she doesn’t stop drinking).49 D. 0. This probability will be cut in half with each glass of expensive wine she drinks. After her first glass there is 10% chance she will stop drinking. After passing MLC an actuarial student decides to celebrate by drinking wine.51 E.30.

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