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EXAM MLC ACTUARIAL MODELS

EXAM MLC SAMPLE QUESTIONS

Copyright 2008 by the Society of Actuaries

Some of the questions in this study note are taken from past SOA examinations.

MLC-09-08

PRINTED IN U.S.A.

1.

For two independent lives now age 30 and 34, you are given: x 30 31 32 33 34 35 36 37

qx

0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8

Calculate the probability that the last death of these two lives will occur during the 3rd year from now (i.e. 2 q30:34 ).

(A) (B) (C) (D) (E)

0.01 0.03 0.14 0.18 0.24

2.

For a whole life insurance of 1000 on (x) with benefits payable at the moment of death: (i)

δt = ⎨

⎧0.04, ⎩0.05,

0 < t ≤ 10 10 < t

(ii)

μx (t ) = ⎨

⎧0.06, 0 < t ≤ 10 ⎩0.07, 10 < t

Calculate the single benefit premium for this insurance.

1

(A) (B) (C) (D) (E)

379 411 444 519 594

3.

For a special whole life insurance on (x), payable at the moment of death: (i) (ii) (iii) (iv)

μ x ( t ) = 0.05 , t > 0

δ = 0.08

The death benefit at time t is bt = e0.06t , t > 0 .

Z is the present value random variable for this insurance at issue.

Calculate Var ( Z ) . (A) (B) (C) (D) (E) 0.038 0.041 0.043 0.045 0.048

2

10 0. 3 μ ( ) = 1/10.4.000 will be paid. (A) (B) (C) (D) (E) 1690 1710 1730 1750 1770 5.000 will be paid. If death occurs from other accidental causes. If death occurs from a cause other than an accident. a death benefit of 250. a death benefit of 500.000 Ax:2 for an individual chosen at random from this group.06 Calculate the single benefit premium for this insurance. A whole life policy provides that upon accidental death as a passenger on an airplane a benefit of 1. δ = 0. you are given: (i) (ii) 25% are smokers (s). 000 where (3) indicates non-accidental death. μ ( ) = 1/ 2.02 1 Calculate 10. 000. For a group of individuals all age x. k 0 1 2 (iii) s qx + k ns qx + k 0. You are given: (i) (ii) Death benefits are payable at the moment of death. 75% are nonsmokers (ns).000. 000 where (1) indicates accidental death as a passenger on an 1 airplane.05 0.000 will be paid. 3 .10 0.15 i = 0.20 0. (iii) (iv) (v) 2 μ ( ) = 1/ 250. 000 where (2) indicates death from other accidental causes.30 0.

4 .79 5. you are given: (i) (ii) (iii) (iv) Deaths are uniformly distributed over each year of age.75 6.11 5. (A) (B) (C) (D) (E) 4.06 Calculate π . q69 = 0. For a special fully discrete whole life insurance of 1000 on (40): (i) (ii) (iii) (iv) The level benefit premium for each of the first 20 years is π .(A) (B) (C) (D) (E) 450 460 470 480 490 6.34 5.03 i = 0. 62. The benefit premium payable thereafter at age x is 1000 v qx . For an annuity payable semiannually. 61.… i = 0.07 7.06 1000 A70 = 530 2 && 69 Calculate a ( ) . x = 60. Mortality follows the Illustrative Life Table.

0 Which of the following is equal to u ( 40 ) ? (A) (B) (C) (D) (E) A30 A40 A40:30 1 A40:30 1 A40:30 5 . 3.59 8.72 8. For a sequence.… (i) α (k ) = −⎜ ⎛ qk −1 ⎞ ⎟ ⎝ pk −1 ⎠ (ii) β (k ) = 1+ i pk −1 (iii) u ( 70 ) = 1.35 8.(A) (B) (C) (D) (E) 8. 2.85 8. u (k ) is defined by the following recursion formula u (k ) = α ( k ) + β ( k ) × u ( k − 1) for k = 1.47 8.

. the contract premium is the level annual benefit premium based on the mortality assumption at issue. 49 q50 = 0. Calculate E[ 10 L K (40) ≥ 10] using the revised mortality assumption. Your co-worker always takes the first express..1. 2..75 10.56 0. 24 k (iii) 10 L is the prospective loss random variable at time 10 using the contract premium. You both are waiting at the same station. k = 0. 2.28 0. 6 . The type of each train is independent of the types of preceding trains. An express gets you to the stop for work in 16 minutes and a local gets you there in 28 minutes.02...9. You always take the first train to arrive.05 Mortality assumptions: At issue Revised prospectively at time 10 k q40 = 0. Calculate the probability that the train you take will arrive at the stop for work before the train your co-worker takes. (A) (B) (C) (D) (E) 0. For a fully discrete whole life insurance of 1000 on (40). At time 10.37 0.1. Subway trains arrive at a station at a Poisson rate of 20 per hour. You are given: (i) (ii) d = 0.04..50 0. k = 0. the actuary decides to increase the mortality rates for ages 50 and higher... 25% of the trains are express and 75% are local.

10 Ax smoker = 0. but less than 300 At least 300 11. you are given: (i) (ii) (iii) (iv) (v) (vi) δ = 0. Var ⎡ aT smoker ⎤ = 8.8 9.6 8.286 T is the future lifetime of (x).818 ⎣ ⎦ Var ⎡ aT non-smoker ⎤ = 8.5 8. ⎣ ⎦ (A) (B) (C) (D) (E) 8. but less than 250 At least 250. but less than 275 At least 275.(A) (B) (C) (D) (E) Less than 225 At least 225.1 7 . of which 30% are smokers and 70% are non-smokers.503 ⎣ ⎦ Calculate Var ⎡ aT ⎤ for an individual chosen at random from this group.0 9. For a group of individuals all age x.444 Ax non-smoker = 0.

the future lifetime of (0). using UDD in each year.96 13.2 f 2 ( t ) .12. A population has 30% who are smokers with a constant force of mortality 0. f 2 ( t ) follows DeMoivre’s law with ω = 100 .6 11. (iii) ⎧ k f1 ( t ) . has the following distribution. T. (i) (ii) f1 ( t ) follows the Illustrative Life Table.81 0.2 11. (A) (B) (C) (D) (E) 10.1. 50 < t ⎩ 10 Calculate (A) (B) (C) (D) (E) p40 .2 and 70% who are non-smokers with a constant force of mortality 0.0 11.88 0. 0 ≤ t ≤ 50 ⎪ fT ( t ) = ⎨ ⎪1.92 0.85 0. Calculate the 75th percentile of the distribution of the future lifetime of an individual selected at random from this population.8 8 .7 11. 0.

22 0. Mortality follows the Illustrative Life Table.24 15. 20% of the inquiries result in the sale of a policy.21 0. Using the normal approximation. i = 0. For each policy: (i) (ii) (iii) The annual contract premium is 500. (A) (B) (C) (D) (E) 0. the total prospective loss at issue for all the policies sold on a particular day. will be less than zero. calculate the probability that S.06 The number of telephone inquiries RIP receives follows a Poisson process with mean 50 per day.000 to 65 year olds by telephone.23 0. you are given: (i) (ii) (iii) (iv) The forces of mortality and interest are constant. Calculate Var ( 0 L ) .20 0. 9 .03 0L c h is the loss-at-issue random variable based on the benefit premium. The number of inquiries and the future lifetimes of all the insureds who purchase policies on a particular day are independent. The RIP Life Insurance Company specializes in selling a fully discrete whole life insurance of 10. 2 Ax = 0.14. For a fully continuous whole life insurance of 1 on (x).20 P Ax = 0.

Mortality follows the Illustrative Life Table.99 16.67 0. 1000 thereafter. 5000 P40 for the next 5 years. (ii) (iii) (iv) i = 0. (A) (B) (C) (D) (E) 255 259 263 267 271 10 . the benefit reserve at the end of year 21 for this insurance.84 0.33 0.06 Calculate 21V . π thereafter.50 0. The annual benefit premium is 1000 P40 for the first 20 years. For a special fully discrete whole life insurance on (40): (i) The death benefit is 1000 for the first 20 years. 5000 for the next 5 years.(A) (B) (C) (D) (E) 0.

9 0.023 0.025 0.0 0. v (ii) 0 0.93 The transition matrix for the annual discount factors is: 1. (A) (B) (C) (D) (E) 0.17. 11 .0 0.95 1 0. you are given: (i) (ii) (iii) (iv) (v) i = 0. Calculate E(Y).026 0.9972 A41 − A40 = 0.94 2 0.024 0.05 p40 = 0.027 18. For a whole life insurance of 1 on (41) with death benefit payable at the end of year of death.0 ⎥ ⎣ ⎦ Y is the present value of the perpetuity payments when the initial state is 1.00822 2 A41 − 2 A40 = 0.0 ⎤ ⎡ 0.0 ⎢ 0.0 0. For a perpetuity-immediate with annual payments of 1: (i) The sequence of annual discount factors follows a Markov chain with the following three states: State number Annual discount factor. Calculate Var(Z).0 1.1⎥ ⎢ ⎥ ⎢ 0.00433 Z is the present-value random variable for this insurance.

59 20.18 0. Then she randomly chooses one of the remaining unsolved problems.86 19.04 (2) Calculate 2 qx . For a double decrement table.71 15. and #3. Then she works on the last unsolved problem. She randomly chooses one of the problems. Calculate the probability that she has solved problem #3 within 10 minutes of starting the problems. She solves problems at a Poisson rate of 1 problem per 5 minutes. and works on it until she solves it. Her advisor has given her three practice problems: #1. ( μ xτ ) (t ) = k t 2 . A member of a high school math team is practicing for a contest.75 16.34 0.(A) (B) (C) (D) (E) 15.67 15.82 16.51 0. and works on it until solved. you are given: (i) (ii) (iii) (1) ( μ x (t ) = 0.2 μ xτ ) (t ). t >0 t >0 ' qx(1) = 0. (A) (B) (C) (D) (E) 0. 12 .45 0. #2.

53 0. qx + k = 0. k = 0. 2.5 22.45 0.3 1.73 21.10.2 1. For (x): (i) (ii) (iii) K is the curtate future lifetime random variable. 1. 13 .3) Calculate Var( X ) . μ m ( x ) = 0.58 0.….4 1. For females. (A) (B) (C) (D) (E) 1. x≥0 x≥0 Calculate q60 for this population. μ f ( x ) = 0.1 1.08.(A) (B) (C) (D) (E) 0. 9 X = min(K .1(k + 1) . For a population which contains equal numbers of males and females at birth: (i) (ii) For males.64 0.

(A) (B) (C) (D) (E) 0.076 0. you are given: (i) (ii) (iii) The benefit premiums are not level.427 Calculate the excess of q64 for Michel over the standard q64 .081 0.096 23.020 14 . (iv) (v) i = 0. (A) (B) (C) (D) (E) 0.014 0. Benefit reserves on his insurance are the same as benefit reserves for a fully discrete whole life insurance of 1 on (45) with standard mortality and level benefit premiums. age 45.016 0.018 0.03 20 V45 = 0. Michel.086 0. exceeds P45 for a standard risk by 0.012 0. π 19 . For a special fully discrete whole life insurance of 1 on Michel. The benefit premium for year 20.091 0. is expected to experience higher than standard mortality only at age 64.010.

Using the normal approximation.000 15 .09476 π = 0. Using a discount rate. d.24. (A) (B) (C) (D) (E) 25 27 29 31 33 25.24905 2 Ax = 0.025 .000 100. of 8%. calculate the death benefit that minimizes the variance of the present value random variable of the new product. Your company currently offers a whole life annuity product that pays the annuitant 12. (A) (B) (C) (D) (E) 0 50.000 at the beginning of each year. A member of your product development team suggests enhancing the product by adding a death benefit that will be paid at the end of the year of death. For a block of fully discrete whole life insurances of 1 on independent lives age x. you are given: (i) (ii) (iii) (iv) (v) i = 0.06 Ax = 0.000 200.05. calculate the minimum number of policies the insurer must issue so that the probability of a positive total loss on the policies issued is less than or equal to 0. Losses are based on the contract premium. where π is the contract premium for each policy.000 150.

(ii) (iii) (iv) (v) i = 0. K ( 42 ) is the curtate future lifetime of ( 42 ) .120 0.080 0.04. Calculate π . Mortality follows the Illustrative Life Table. t > 0 μ y ( t ) = 0.26. (A) (B) (C) (D) (E) 0.150 27.105 0.055 0. μ x ( t ) = 0. For a special fully discrete whole life insurance of 1000 on (42): (i) The contract premium for the first 4 years is equal to the level benefit premium for a fully discrete whole life insurance of 1000 on (40). you are given: (i) (ii) (iii) (iv) (v) T ( x ) and T ( y ) are independent. based on the contract premium.06 π is the annual benefit premium payable until the first of (x) and (y) dies. ⎣ ⎦ 16 . t > 0 δ = 0.06 is the prospective loss random variable at time 3. For a special fully continuous last survivor insurance of 1 on (x) and (y).08. The contract premium after the fourth year is equal to the level benefit premium for a fully discrete whole life insurance of 1000 on (42). 3L (vi) Calculate E ⎡ 3 L K (42) ≥ 3⎤ .

05 (ii) (iii) Calculate π .(A) (B) (C) (D) (E) 27 31 44 48 52 28.6 E(T) = 62 E ⎡ min ( T . t ) ⎤ = t − 0. For T. ⎣ ⎦ 0 < t < 60 Calculate the complete expectation of life at 40. the future lifetime random variable for (0): (i) (ii) (iii) (iv) ω > 70 40 p0 = 0. 17 . Two actuaries use the same mortality table to price a fully discrete 2-year endowment insurance of 1000 on (x). Kira calculates level annual benefit premiums of π . (i) Kevin calculates non-level benefit premiums of 608 for the first year and 350 for the second year. (A) (B) (C) (D) (E) 30 35 40 45 50 29.005 t 2 . d = 0.

500 36.700 18 . The benefit reserve at the end of year 9 is 32.012 qx +11 = 0.014 The level annual benefit premium is 2078. Calculate 100. For a fully discrete 10-payment whole life insurance of 100.300 35.000 Ax +11 .535.500 36. (A) (B) (C) (D) (E) 34.05 qx +9 = 0.000 on (x). you are given: (i) (ii) (iii) (iv) (v) (vi) i = 0.100 34.011 qx +10 = 0.(A) (B) (C) (D) (E) 482 489 497 508 517 30.

Given: The survival function s x . o Calculate e 45:65 .31. where 0≤ x <1 bg sb x g = 1 − {de i / 100}.5 ≤ x bg s x = 1. You are given: (i) (ii) Mortality follows DeMoivre’s law with ω = 105. (A) (B) (C) (D) (E) 33 34 35 36 37 32. x 1 ≤ x < 4.55 0. 4. (45) and (65) have independent future lifetimes.20 19 . bg (A) (B) (C) (D) (E) 0.00 1.45 0.80 1. sb x g = 0.5 Calculate μ 4 .

16 0. (A) (B) (C) (D) (E) 0. the actuarial present value of a 2-year deferred 2-year term insurance 20 .33 0.11 0. t > 0 μ b g bt g = 0.3 .17 i = 0. For a triple decrement table.7 .33.12 0.5 . you are given: (i) (ii) (iii) bg μ b g bt g = 0.14 0.16 0. A 60 .26 0.15 0.18 0.13 0.39 34. You are given: (i) the following select-and-ultimate mortality table with 3-year select period: x 60 61 62 63 64 (ii) qx q x +1 q x +2 q x+3 0.11 0.13 0.19 x+3 63 64 65 66 67 0. t > 0 2 x 3 x b Calculate q x2 g .15 0.09 0.03 22 Calculate on 60 .30 0.12 0.15 0.36 0.13 0. t > 0 μ bx1g t = 0.17 0.10 0.14 0.

3 36. (A) (B) (C) (D) (E) 12.160 0.01.3 2 Each decrement is uniformly distributed over each year of age in the double decrement table.06 Calculate a x .5 13. 0≤t <5 5≤ t δ = 0. For a double decrement table.186 0.1 .156 0. You are given: (i) μ x t = 0. (ii) (iii) x bg μ bt g = 0. you are given: (i) (ii) (iii) q ' (x ) = 0. 1 0. Calculate bg 21 .0 13.190 0.3 q x + 0.2 1 q ' (x ) = 0.(A) (B) (C) (D) (E) 0.4 13.195 35.02.9 14.

10 o Le ( ) = o L + E .053 0.217 0. where o L = vT − P ( Ax ) aT E = co + ( g − e ) aT co = initial expenses g = 0.0030 .0066 . is the expense-augmented loss variable.020 0.434 0. you are given: (i) (ii) (iii) (iv) δ = 0. e = 0.308 0. is the annual expense loading in the premium.042 0.472 22 . Calculate Var ( o L e ) .208 0. For a fully continuous whole life insurance of 1 on (x).04 ax = 12 Var v T = 0.031 0.064 37. is the annual rate of continuous maintenance expense. (A) (B) (C) (D) (E) 0.(A) (B) (C) (D) (E) 0.

0 Terminated 0.0 Sick 0.1 0.1 1.0 The mean annual healthcare cost each year for each health state is: Mean Healthy Sick Terminated 500 3000 0 (iii) (iv) Transitions occur at the end of the year.38. For a Markov model for an insured population: (i) Annual transition probabilities between health states of individuals are as follows: Healthy Healthy Sick Terminated (ii) 0.3 0. (A) (B) (C) (D) (E) –390 –200 –20 160 340 23 .6 0. i=0 A contract premium of 800 is paid each year by an insured not in the terminated state. Calculate the expected value of contract premiums less healthcare costs over the first 3 years for a new healthy insured.7 0.2 0.

39.

Lucky Tom finds coins on his way to work at a Poisson rate of 0.5 coins/minute. The denominations are randomly distributed: (i) (ii) (iii) 60% of the coins are worth 1 each 20% of the coins are worth 5 each 20% of the coins are worth 10 each.

Calculate the probability that in the first ten minutes of his walk he finds at least 2 coins worth 10 each, and in the first twenty minutes finds at least 3 coins worth 10 each. (A) (B) (C) (D) (E) 0.08 0.12 0.16 0.20 0.24

40.

For a fully discrete whole life insurance of 1000 on (60), the annual benefit premium was calculated using the following: (i) (ii) (iii) (iv)

i = 0.06

q60 = 0.01376

1000 A60 = 369.33

1000 A61 = 383.00

A particular insured is expected to experience a first-year mortality rate ten times the rate used to calculate the annual benefit premium. The expected mortality rates for all other years are the ones originally used.

24

Calculate the expected loss at issue for this insured, based on the original benefit premium. (A) (B) (C) (D) (E) 72 86 100 114 128

25

41.

For a fully discrete whole life insurance of 1000 on (40), you are given: (i) (ii) (iii) (iv) (v)

i = 0.06

Mortality follows the Illustrative Life Table.

&& a40:10 = 7.70 && a50:10 = 7.57

1 1000 A40:20 = 60.00

At the end of the tenth year, the insured elects an option to retain the coverage of 1000 for life, but pay premiums for the next ten years only.

Calculate the revised annual benefit premium for the next 10 years.

(A) (B) (C) (D) (E)

11 15 17 19 21

26

(ii) (iii) (iv) (v) b lxτ g = 1000 b q x2 g = 0.55 0.59 27 .57 0.51 0. you are given: (i) Deaths are uniformly distributed over each year of age in the single-decrement table.53 0.42. Withdrawals occur only at the end of each year of age.40 b b d x1g = 0. For a double-decrement table where cause 1 is death and cause 2 is withdrawal.45 d x2 g Calculate pxb 2 g . ′ (A) (B) (C) (D) (E) 0.

he accepts the application without looking at it. The expected profit on a “bad” risk is –100 with variance 90. If it comes up heads. you build a multiple decrement table. the number who fail to make adequate progress in each of the first three years is 10.000. Of 30 hires. 28 . The expected profit on a “good” risk is 300 with variance 10. he accepts the application if and only if it is a “good” risk. the number who leave the program for other reasons in each of the first three years is 2.43. If the coin comes up tails. and 8. Since Bob is overworked. and 4. To predict the number who will complete the program. You decide that the following associated single decrement assumptions are appropriate: (i) Of 40 hires. You intend to hire 200 employees for a new management-training program. Each application has a 1/3 chance of being a “bad” risk and a 2/3 chance of being a “good” risk. 2. 8. (ii) (iii) (iv) Calculate the expected number who fail to make adequate progress in the third year. 6. the number who resign from the company in each of the first three years is 6.000. respectively. (A) (B) (C) (D) (E) 4 8 12 14 17 44. each time he gets an application he flips a fair coin. respectively. Of 20 hires. Calculate the variance of the profit on the applications he accepts today. You use the uniform distribution of decrements assumption in each year in the multiple decrement table. Bob is an overworked underwriter. and 2. respectively. Applications arrive at his desk at a Poisson rate of 60 per day.

000 4. mortality follows De Moivre’s Law with the same limiting age.000 45. (A) (B) (C) (D) (E) 38.000 5.06 (ii) Calculate the annual benefit that your company can offer to this individual.500. and your medical experts estimate that his complete life expectancy is only 15 years.500. this individual is not as healthy as your company’s typical annuitant.000 5. You also assume: (i) For typical annuitants of all ages.(A) (B) (C) (D) (E) 4.000 46.000 to a 50-year old individual. typical 50-year old annuitants have a complete life expectancy of 25 years. Your company is competing to sell a life annuity-due with an actuarial present value of 500. i = 0.000 41.000. However. ω .000 52.000. Based on your company’s experience.000 49. You decide to price the benefit using the issue age that produces a complete life expectancy of 15 years.000 29 .000 6.000.

i = 0. For a temporary life annuity-immediate on independent lives (30) and (40): (i) (ii) Mortality follows the Illustrative Life Table. (A) (B) (C) (D) (E) 73.17 7. A35 = 0.42898 (iii) (iv) (v) (vi) b IAg 35 = 616761 . i = 0.06 Calculate a30:40:10 . The death benefit is equal to 1000 plus the return of all benefit premiums paid in the past without interest.66 30 .46. (A) (B) (C) (D) (E) 6.42 78. you are given: (i) (ii) The annual benefit premium is payable at the beginning of each year.05 Calculate the annual benefit premium for this insurance. The death benefit is paid at the end of the year of death.88 8.64 7. For a special whole life insurance on (35).95 81.66 75.86 47.28 77.74 9.

An express gets you to work in 16 minutes and a local gets you there in 28 minutes.05 Premiums are payable until the first death. For a special fully continuous whole life insurance of 1 on the last-survivor of (x) and (y). The types of each train are independent. you are given: (i) (ii) (iii) (iv) T x and T y are independent. Your expected arrival time is 6 minutes later than your co-worker’s.07 0. t>0 δ = 0.5 minutes earlier than your co-worker’s. Your expected arrival times are the same. 49.10 0. Calculate the level annual benefit premium for this insurance. Which of the following is true? (A) (B) (C) (D) (E) Your expected arrival time is 6 minutes earlier than your co-worker’s.04 0. Subway trains arrive at a station at a Poisson rate of 20 per hour. Your expected arrival time is 4.5 minutes later than your co-worker’s.48.07. Your co-worker always takes the first express.08 0. You always take the first train to arrive. x y bg bg μ bt g = μ bt g = 0.14 31 . You both are waiting at the same station. Your expected arrival time is 4. (A) (B) (C) (D) (E) 0. 25% of the trains are express and 75% are local.

you are given: (i) (ii) (iii) (iv) (v) 1000 P20 = 10 1000 20V20 = 490 1000 21V20 = 545 1000 22V20 = 605 q40 = 0.0 32.028 51.025 0. For a fully discrete whole life insurance of 1000 on (60).022 Calculate q41 . (A) (B) (C) (D) (E) 31. (A) (B) (C) (D) (E) 0. For a fully discrete whole life insurance of 1000 on (20).5 32.026 0.2 32 . Calculate the annual benefit premium for this insurance.06 Mortality follows the Illustrative Life Table.50. except that there are extra mortality risks at age 60 such that q60 = 0.1 33.024 0. you are given: (i) (ii) i = 0.015 .027 0.1 33.

The mortality of (x) and (y) follows a common shock model with components T*(x).97.96. (A) (B) (C) (D) (E) 0. λ = 0. For a water reservoir: (i) (ii) (iii) (iv) (v) The present level is 4999 units.2 0. T*(y) and Z are independent and have exponential distributions with respective forces μ1 .2 per day.8 The numbers and amounts of rainfalls are independent.48 0. The distribution of the amount of a rainfall is as follows: Amount 8000 5000 (vi) Probability 0.52. The probability that ( y ) survives 1 year is 0. (ii) (iii) (iv) The probability that ( x ) survives 1 year is 0. 1000 units are used uniformly daily. The only source of replenishment is rainfall. T*(y) and Z.01 33 .37 0.50 53. μ 2 and λ . The number of rainfalls follows a Poisson process with λ = 0. Calculate the probability that the reservoir will be empty sometime within the next 10 days.27 0.39 0. (i) T*(x).

Calculate the probability that interest rates will decrease from year 2003 to 2004. She models interest rate behavior by a Markov model assuming: (i) (ii) Interest rates always change between years.79 0.70 0.65 0. (A) (B) (C) (D) (E) 0.76 0.67 0.84 0.40 0.20 0. Nancy reviews the interest rates each year for a 30-year fixed mortgage issued on July 1.72 0. The change in any given year is dependent on the change in prior years as follows: from year t − 3 to year t − 2 Increase Decrease Increase Decrease from year t − 2 to year t − 1 Increase Decrease Decrease Increase Probability that year t will increase from year t − 1 0.25 She notes that interest rates decreased from year 2000 to 2001 and from year 2001 to 2002.74 54.87 34 . (A) (B) (C) (D) (E) 0.Calculate the probability that both ( x ) and ( y ) survive 5 years.10 0.82 0.

For a 20-year deferred whole life annuity-due of 1 per year on (45).25 Calculate IA .525 56. i=0 Calculate the probability that the sum of the annuity payments actually made will exceed the actuarial present value at issue of the annuity. x d i (A) (B) (C) (D) (E) 2.667 5. you are given: (i) (ii) (iii) The force of mortality is constant.000 4.500 35 .450 0.500 0.889 3. (A) (B) (C) (D) (E) 0.06 2 Ax = 0. For a continuously increasing whole life insurance on x .55.475 0.125 4. you are given: (i) (ii) Mortality follows De Moivre’s law with ω = 105 . bg δ = 0.425 0.

for t > 0 . has just purchased two new tools with independent future lifetimes. One tool has a 10-year maximum lifetime and the other a 7-year maximum lifetime. XYZ Co.04 bg bg Calculate the actuarial present value of this insurance. (A) (B) (C) (D) (E) 5. the machine must be replaced.004 . XYZ Paper Mill purchases a 5-year special insurance paying a benefit in the event its machine breaks down. (A) (B) (C) (D) (E) 7840 7880 7920 7960 8000 36 . If the cause is “minor” (1). δ = 0. μ b1g t = 0100 and μ b 2 g t = 0.57. Once a benefit is paid. If the cause is “major” (2). Each tool has its own distinct De Moivre survival pattern.2 5.4 5. the insurance contract is terminated. The benefit for cause (2) is 500. Calculate the expected time until both tools have failed. Given: (i) (ii) (iii) (iv) (v) The benefit for cause (1) is 2000 payable at the moment of breakdown.0 5.8 58.000 payable at the moment of breakdown. only a repair is needed.6 5.

37 .06. Using the normal approximation.75q g / b1 − q gh 1n 1 − q x / 1 − 0.75q g / b1 − p gh 1ncb1 − 0.75R Determine an expression for k. (A) (B) (C) (D) (E) gh cb g b 1ncb1 − 0.75q gh 1ncb1 − 0. You are given: (i) (ii) (iii) R = 1− e − μ x t dt 0 z 1 bg c S = 1− e z − 1 0 μ x t + k dt bg h k is a constant such that S = 0. Mortality follows the Illustrative Life Table.75 p g / b1 − p gh 1ncb1 − p g / b1 − 0.000 on each of 10. such that the probability of a positive total loss is 1%. For a fully discrete whole life insurance of 100. i = 0.000 lives age 60.59. calculate π .000. π is the premium for each insurance of 100.75q x x x x x x x x x 60. you are given: (i) (ii) (iii) (iv) The future lifetimes are independent.

(A) (B) (C) (D) (E) 3340 3360 3380 3390 3400 61. For a special fully discrete 3-year endowment insurance on (75).05 Calculate the level benefit premium for this insurance. Mortality follows the Illustrative Life Table. (A) (B) (C) (D) (E) 321 339 356 364 373 38 . The death benefit is 1000 plus the benefit reserve at the end of the year of death. i = 0. you are given: (i) (ii) (iii) (iv) The maturity value is 1000.

62.

A large machine in the ABC Paper Mill is 25 years old when ABC purchases a 5-year term insurance paying a benefit in the event the machine breaks down. Given: (i) Annual benefit premiums of 6643 are payable at the beginning of the year. (ii) (iii) (iv) (v) A benefit of 500,000 is payable at the moment of breakdown. Once a benefit is paid, the insurance contract is terminated. Machine breakdowns follow De Moivre’s law with lx = 100 − x .

i = 0.06

Calculate the benefit reserve for this insurance at the end of the third year. (A) (B) (C) (D) (E) –91 0 163 287 422

63.

For a whole life insurance of 1 on x , you are given: (i) The force of mortality is μ x t . (ii) (iii) (iv) The benefits are payable at the moment of death.

bg bg

δ = 0.06

Ax = 0.60

Calculate the revised actuarial present value of this insurance assuming μ x t is increased by 0.03 for all t and δ is decreased by 0.03.

bg

39

(A) (B) (C) (D) (E)

0.5 0.6 0.7 0.8 0.9

64.

A maintenance contract on a hotel promises to replace burned out light bulbs at the end of each year for three years. The hotel has 10,000 light bulbs. The light bulbs are all new. If a replacement bulb burns out, it too will be replaced with a new bulb. You are given: For new light bulbs, (i)

q0 = 010 . q1 = 0.30 q2 = 0.50

(ii)

Each light bulb costs 1.

i = 0.05 (iii) Calculate the actuarial present value of this contract.

(A) (B) (C) (D) (E)

6700 7000 7300 7600 8000

65.

You are given:

μ x =

Calculate e25:25 .

o

b g R0..04,, S0 05 T

0 < x < 40 x > 40

40

(A) (B) (C) (D) (E)

14.0 14.4 14.8 15.2 15.6

66.

**For a select-and-ultimate mortality table with a 3-year select period: (i) x 60 61 62 63 64 (ii) (iii) (iv)
**

qx q x +1 q x +2

qx+3

0.15 0.16 0.17 0.18 0.19

x +3

0.09 0.10 0.11 0.12 0.13

0.11 0.12 0.13 0.14 0.15

0.13 0.14 0.15 0.16 0.17

63 64 65 66 67

**White was a newly selected life on 01/01/2000. White’s age on 01/01/2001 is 61.
**

P is the probability on 01/01/2001 that White will be alive on 01/01/2006.

Calculate P. (A) (B) (C) (D) (E) 0 ≤ P < 0.43 0.43 ≤ P < 0.45 0.45 ≤ P < 0.47 0.47 ≤ P < 0.49 0.49 ≤ P ≤ 1.00

41

For a continuous whole life annuity of 1 on ( x ) : (i) T ( x ) is the future lifetime random variable for ( x ) .90 && a x = 5.50 2. a x = 12. Calculate 10V . Level benefit premiums are payable for life.05 v = 0.89 6. (ii) (iii) The force of interest and force of mortality are constant and equal.25 7.50 Calculate the standard deviation of aT ( x ) . qx = 0. (A) 795 (B) (C) (D) (E) 1000 1090 1180 1225 42 .20 (vii) 10V is the benefit reserve at the end of year 10 for this insurance.67 2. (A) (B) (C) (D) (E) 1.22 68.00 10Vx = 0. For a special fully discrete whole life insurance on (x): (i) (ii) (iii) (iv) (v) (vi) The death benefit is 0 in the first year and 5000 thereafter.67.

75 px +1 = 0. K(55) is the curtate future lifetime of (55).15 (A) (B) (C) (D) (E) 0. The level annual contract premium is 50.23 bg 70.040 0. (ii) (iii) (iv) px = 0. based on the contract premium.020 0.002 0.95 is the lowest premium such that there is a 0% chance of loss in year 1. For a special fully discrete 3-year term insurance on (55). decrement 2 is all other causes of death.005 0.80 Z is the random variable for the present value at issue of future benefits. Calculate Var Z .060 The death benefit is 2000 for accidental deaths and 1000 for deaths from all other causes.06 0. qx( ) 1 2 qx ( ) 55 56 57 (iii) (iv) i = 0. For a fully discrete 2-year term insurance of 1 on (x): (i) 0.19 0.69. 1L (v) (vi) (vii) is the prospective loss random variable at time 1.17 0. 0.008 0. 43 .21 0. whose mortality follows a double decrement model: (i) (ii) x Decrement 1 is accidental death.

m.Calculate E ⎡ 1 L K ( 55 ) ≥ 1⎤ .022 0. ⎣ ⎦ (A) (B) (C) (D) (E) 5 9 13 17 20 71.020 0. to 9 per hour at 2:00 p.024 44 . and 2:00 p. Calculate the probability that exactly 2 customers arrive between 1:00 p.m.016 0. Customers arrive at a store at a Poisson rate that increases linearly from 6 per hour at 1:00 p.018 0.m.m. (A) (B) (C) (D) (E) 0.

both age 50.9698 0. 45 . For a select-and-ultimate table with a 2-year select period: x px p x +1 px + 2 x+2 48 49 50 51 0.95. Each of 100 independent lives purchase a single premium 5-year deferred whole life insurance of 10 payable at the moment of death. Keith was selected at age 45 and Clive was selected at age 50. Calculate the probability that exactly one will be alive at the end of three years.9849 0.9838 0.9865 0.9803 0.9831 0.06 F is the aggregate amount the insurer receives from the 100 lives.9819 0.72. calculate F such that the probability the insurer has sufficient funds to pay all claims is 0.9858 0. (A) (B) (C) (D) (E) 280 390 500 610 720 73.04 δ = 0.9713 0.9841 0.9682 0.9664 50 51 52 53 Keith and Clive are independent lives. Using the normal approximation. You are given: (i) (ii) (iii) μ = 0.

but less than 0.800 20. For a tyrannosaur with 10. If his stored calories reach 0.5 days.40 0. he dies. (A) (B) (C) (D) (E) 0. The tyrannosaur can store calories without limit until needed.000 calories each) at a Poisson rate of 1 per day.800 21. The tyrannosaur eats only scientists.(A) (B) (C) (D) (E) Less than 0. Calculate the expected calories eaten in the next 2.145 At least 0. (ii) (iii) (iv) 74.000 per day.50 0.30 0.125.135.125 At least 0.000 calories stored: (i) The tyrannosaur uses calories uniformly at a rate of 10.800 46 . (A) 17.145 74-75.5 days.135 At least 0.800 19. but less than 0.800 (B) (C) (D) (E) 18. Calculate the probability that the tyrannosaur dies within the next 2.70 75.115 At least 0.115. Use the following information for questions 74 and 75. The tyrannosaur eats scientists (10.60 0. but less than 0.

to those who survive. (A) (B) (C) (D) (E) 2. You are given: (i) (ii) (iii) Px = 0. using the equivalence principle.00864 Calculate Px1:n . or P.563 1 Px:n = 0.090 nVx = 0.085 47 .08 Calculate P.040 0. You are given: Mortality follows the Illustrative Life Table.33 2. (i) i = 0. The fund will pay the following benefits: • • 10.38 3.07 3.76. for those who die before age 72.55 77.024 0. payable at the end of the year of death.065 0.02 3. payable at age 72. (A) (B) (C) (D) (E) 0. A fund is established by collecting an amount P from each of 100 independent lives age 70.008 0.

(ii) (iii) (iv) The constant force of mortality for smokers is 0.06. (A) (B) (C) (D) (E) 0.03. The constant force of mortality for non-smokers is 0.3 13. You are given: Mortality follows De Moivre’s law with ω = 100 .8 14. (i) (ii) (iii) i = 0.78.40 Calculate 10V A40 .081 0.05 The following annuity-certain values: a40 = 17.079 0.1 14.71 a60 = 19. 48 .08 Calculate Var aT (A) (B) (C) (D) (E) 13.077 0.083 c h 79. you are given: (i) 30% are smokers and 70% are non-smokers.58 a50 = 18. δ = 0.0 13.075 0.6 FH bxg K I for an individual chosen at random from this group. For a group of individuals all age x.

60 to 0. (A) 1.10 q80 :84 if p82 is decreased from 0.000 1.40 0.000.19 2 0. The probability that a claim is Type I is 1/3. whose future lifetimes are independent: x px 80 81 82 83 84 85 86 Calculate the change in the value (A) (B) (C) (D) (E) 0. The variance of aggregate claims is 2. (i) (ii) (iii) (iv) The expected number of claims is 3000.100.700. Type I and Type II.50 0. For (80) and (84). Calculate the variance of aggregate claims with Type I claims excluded.800.06 0.30.000. Type I claim amounts are exactly 10 each.000 2.000 2. A Poisson claims process has two types of claims.20 0.25 0.000 (B) (C) (D) (E) 1.60 0.16 0.80.100.03 0.15 0.10 0.000 49 .900. 81.

′b decrements occur at time 0.114 0. His career is subject to two decrements: (i) Decrement 1 is mortality.117 0. Decrement 2 is leaving academic employment.116 0.05. q401g = 0100 and decrements .34 bg 83.28 0. q402g = 0125 and all .118 50 .7. is an actuarial science professor.115 0.25 0. with (ii) μ b 2g t = 0. In the single decrement table associated with cause (2). ′b are uniformly distributed over the year.82. For a double decrement model: (i) In the single decrement table associated with cause (1).31 0.22 0. (A) (B) (C) (D) (E) 0. Don. t ≥ 0 50 Calculate the probability that Don remains an actuarial science professor for at least five but less than ten years. The associated single decrement table follows De Moivre’s law with ω = 100 . age 50. (A) (B) (C) (D) (E) 0. (ii) b2 Calculate q40g .

t ≥ 0 .84. For a special fully continuous whole life insurance on (65): The death benefit at time t is bt = 1000 e0.04 bg Calculate 2V . the death benefit is 1000. using the equivalence principle. the benefit reserve at the end of year 2.04t .02. μ 65 t = 0. For a special 2-payment whole life insurance on (80): Premiums of π are paid at the beginning of years 1 and 3. (i) (ii) (iii) (iv) Level benefit premiums are payable for life. 369 (A) (B) (C) (D) (E) 381 397 409 425 85. (A) 0 (B) (C) (D) (E) 29 37 61 83 51 . Otherwise. There is a partial refund of premium feature: If (80) dies in either year 1 or year 3. (iv) (v) Mortality follows the Illustrative Life Table. t ≥ 0 δ = 0. (i) (ii) (iii) The death benefit is paid at the end of the year of death.06 Calculate π . the death benefit is 1000 + π 2 . i = 0.

86.

**You are given: (i) (ii) (iii) (iv)
**

Ax = 0.28 Ax +20 = 0.40

1 Ax:20 = 0.25

i = 0.05

Calculate a x:20 . (A) (B) (C) (D) (E) 11.0 11.2 11.7 12.0 12.3

87.

On his walk to work, Lucky Tom finds coins on the ground at a Poisson rate. The Poisson rate, expressed in coins per minute, is constant during any one day, but varies from day to day according to a gamma distribution with mean 2 and variance 4, that is,

1 f (λ ) = e − ( λ 2) , λ > 0 2

Calculate the probability that Lucky Tom finds exactly one coin during the sixth minute of today’s walk.

(A) (B) (C) (D) (E)

0.22 0.24 0.26 0.28 0.30 52

88.

**At interest rate i: (i) (ii)
**

&& ax = 5.6

**The actuarial present value of a 2-year certain and life annuity-due of 1 on (x) is && a = 5.6459 .
**

x:2

(iii) (iv)

ex = 8.83 ex +1 = 8.29

Calculate i. (A) (B) (C) (D) (E) 0.077 0.079 0.081 0.083 0.084

89.

A machine is in one of four states (F, G, H, I) and migrates annually among them according to a Markov process with transition matrix: F F G H I 0.20 0.50 0.75 1.00 G 0.80 0.00 0.00 0.00 H 0.00 0.50 0.00 0.00 I 0.00 0.00 0.25 0.00

At time 0, the machine is in State F. A salvage company will pay 500 at the end of 3 years if the machine is in State F. Assuming v = 0.90 , calculate the actuarial present value at time 0 of this payment.

53

(A) (B) (C) (D) (E)

150 155 160 165 170

90.

The claims department of an insurance company receives envelopes with claims for insurance coverage at a Poisson rate of λ = 50 envelopes per week. For any period of time, the number of envelopes and the numbers of claims in the envelopes are independent. The numbers of claims in the envelopes have the following distribution: Number of Claims 1 2 3 4

Probability

0.20 0.25 0.40 0.15

Using the normal approximation, calculate the 90th percentile of the number of claims received in 13 weeks.

(A) (B) (C) (D) (E)

1690 1710 1730 1750 1770

54

calculate the expected time until the second death.23 11.63 7.08 (iii) L is the loss-at-issue random variable based on the benefit premium. a male age 65 and a female age 60.88 13. Calculate Var (L). 75 At age 60. 4. bg x . You are given: (i) (ii) (iii) The survival function for males is s x = 1 − Female mortality follows De Moivre’s law. For two independent lives. the female force of mortality is 60% of the male force of mortality. For a fully continuous whole life insurance of 1: (i) (ii) μ = 0.17 92.33 (A) (B) (C) (D) (E) 5. 0 < x < 75 . (A) 1 10 1 5 1 4 1 3 1 2 (B) (C) (D) (E) 55 .04 δ = 0.91.

(i) (ii) (iii) Mortality follows the Illustrative Life Table. During the deferral period. Deaths are uniformly distributed over each year of age.003 0.002 0.005 56 . (A) (B) (C) (D) (E) 0.001 0.004 0. You are given: The future lifetimes of (50) and (50) are independent.93. (ii) Which of the following is a correct expression for the benefit reserve at the end of the 20th year? (A) (B) (C) (D) (E) && s s ( a60 / &&35 ) &&20 && s s ( a60 / &&20 ) &&35 s && s ( &&20 / a60 ) &&35 s && s ( &&35 / a60 ) &&20 && s ( a60 / &&35 ) 94. a death benefit equal to the benefit reserve is payable at the end of the year of death. For a deferred whole life annuity-due on (25) with annual payment of 1 commencing at age 60.5 for the last survivor status of (50) and (50). you are given: (i) Level benefit premiums are payable at the beginning of each year during the deferral period. Calculate the force of failure at duration 10.

95. t ≥ 0 δ = 0. (A) (B) (C) (D) (E) 1. Force of mortality for accidental death: ( μ x1) ( t ) = 0. The benefit for non-accidental death after the first 2 years is 50.000 7.10 Calculate the single benefit premium for this insurance.000 57 .000 15.000 4.29.000.01. Benefits are payable at the moment of death.000 in all years.000 11. For a special whole life insurance: (i) (ii) The benefit for accidental death is 50. t ≥ 0 (iii) (iv) (v) (vi) (vii) (2 Force of mortality for non-accidental death: μ x ) ( t ) = 2. The benefit for non-accidental death during the first 2 years is return of the single benefit premium without interest.

58 . For a special fully discrete 10-payment whole life insurance on (30) with level annual benefit premium π : (i) The death benefit is equal to 1000 plus the refund. For a special 3-year deferred whole life annuity-due on (x): (i) (ii) (iii) (iv) (v) (vi) (vii) i = 0. A30 = 0102 . There is no death benefit during the three year deferral period.04 The first annual payment is 1000.088 1 30: 10 b IAg = 0. 2 0. (A) (B) (C) (D) (E) 2625 2825 3025 3225 3425 97. .96.99 k px Calculate the annual benefit premium.747 Calculate π .078 && a30: 10 = 7. without interest. ex = 1105 is the curtate expectation of life for (x). of the benefit premiums paid.98 3 0.97 1 k 0. Payments in the following years increase by 4% per year. Level benefit premiums are payable at the beginning of each of the first three years. 10 (ii) (iii) (iv) (v) A30 = 0.

s(x) followed de Moivre’s law with ω = 100 as the limiting age. purchases a 5-payment. Calculate the value of L if Pat dies on June 30. For a given life age 30.0 15. age 40. 10-year term insurance of 100. Contract premiums of 4000 are payable annually at the beginning of each year for 5 years.9 15. On January 1. Pat.1 15. Assuming de Moivre’s law still applies after the medical breakthrough.(A) (B) (C) (D) (E) 14. i = 0. calculate the new limiting age. it is estimated that an impact of a medical breakthrough will be an o increase of 4 years in e 30 .000: (i) (ii) Death benefits are payable at the moment of death. the complete expectation of life.05 (iii) (iv) L is the loss random variable at time of issue.2 15. Prior to the medical breakthrough.3 98. (A) (B) (C) (D) (E) 104 105 106 107 108 99. 59 . 2002. 2004.

000 for all other causes of death.000 100.000 108.700 82.05 Salary of (x) at time t is 50.000 92.700 85. You are given: (i) (ii) (iii) (iv) (v) ( μ xτ ) ( t ) = 0. A special whole life insurance on (x) pays 10 times salary if the cause of death is an accident and 500. Calculate the actuarial present value of the benefits at issue. t ≥ 0 Benefits are payable at the moment of death.04 t . (A) (B) (C) (D) (E) 78.01 .000 60 .000 83. t ≥ 0 ( μ xaccident ) ( t ) = 0. t ≥ 0 .100 80.000 e0.000 100.900 88.(A) (B) (C) (D) (E) 77.001 . δ = 0.

(A) (B) (C) (D) (E) 379 487 566 670 768 102.72. The denominations are randomly distributed: (i) (ii) (iii) 60% of the coins are worth 1. Lucky Tom finds coins on his way to work at a Poisson rate of 0. the level annual benefit premium for a fully discrete whole life insurance of 1000 on (x+20). 20% of the coins are worth 10.101. Calculate 1000 Px +20 .06 qx +19 = 0. you are given: (i) (ii) (iii) (iv) i = 0.5 coins per minute. For a fully discrete 20-payment whole life insurance of 1000 on (x).03.01254 The level annual benefit premium is 13. Calculate the variance of the value of the coins Tom finds during his one-hour walk to work. The benefit reserve at the end of year 19 is 342. (A) (B) (C) (D) (E) 27 29 31 33 35 61 . 20% of the coins are worth 5.

06 b g Calculate the premium Pxy . t ≥ 0.06 . Calculate (A) (B) (C) (D) (E) 10 0.1 Pxy = 0.04 0.18 0. the annual benefit premium for a fully discrete insurance of 1 on b xyg .20 0. μ 60 (τ ) (t ) = 2 μ 60 (1) (t ). t ≥ 0 (τ q60 ) .22 62 . For a multiple decrement model on (60): (i) (ii) μ 60 (1) (t ). follows the Illustrative Life Table.05 0. You are given: Px = Py = 0. the probability that decrement occurs during the 11th year. where Pxy is the annual benefit premium for a fully discrete insurance of 1 on xy .14 0.16 0.06 0.103.07 104. (x) and (y) are two lives with identical expected mortality. (A) (B) (C) (D) (E) 0.03 0. d = 0.

you are given the following from a multiple decrement model: 1000 students enter the college at t = 0 . The following graph is related to current human mortality: 0 20 40 Age 60 80 100 Which of the following functions of age does the graph most likely show? 63 . (i) (ii) (iii) Students leave the college for failure 1 or all other reasons 2 . For students entering a college. (iv) (A) (B) (C) (D) (E) 8 10 24 34 41 106.105. bg bg bg μ b g bt g = 0. Calculate the expected number of students who will leave because of failure during their fourth year.04 μ b1g t = μ 2 0≤t ≤4 0≤t <4 48 students are expected to leave the college during their first year due to all causes.

(A) (B) (C) (D) (E) bg l μb x g μ x x lx p x lx lx 2 107.040 64 .065 E [ Z ] Calculate qx .025 0.030 0.020 0. (A) (B) (C) (D) (E) 0.035 0. Z is the present value random variable for a 15-year pure endowment of 1 on (x): (i) (ii) (iii) The force of mortality is constant over the 15-year period.9 Var ( Z ) = 0. v = 0.

000 400.35 i = 0. 10 V A −10 V B = 101. 109. kV B (iii) (iv) (v) (vi) qx +10 = 0. (ii) is the benefit reserve at the end of year k for type B insurance. which is a fully discrete 10-payment whole life insurance of 1000 on (x).000 (iv) i = 0.108. For a special 3-year term insurance on ( x ) .06 11 V Calculate (A) (B) (C) (D) (E) 91 93 95 97 99 A − 11V B .004 The annual benefit premium for type B is 8. 1. you are given: (i) (ii) (iii) Z is the present-value random variable for the death benefits.36. bg 65 .06 Calculate E Z . payable at the end of the year of death: k 0 1 2 bk +1 300. 2 The following death benefits. You are given: (i) kV A is the benefit reserve at the end of year k for type A insurance. qx + k = 0. which is a fully discrete whole life insurance of 1000 on (x).02( k + 1) k = 0.000 350.

k = 1. k = 1. (A) (B) (C) (D) (E) 4. 20. 2.6 4.3 66 . For a special fully discrete 20-year endowment insurance on (55): (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) Death benefits in year k are given by bk = 21 − k . 2.10 i = 0. Annual benefit premiums are level.(A) (B) (C) (D) (E) 36.800 39.1 5.000 110. The maturity benefit is 1.400 43.6 q65 = 0.5 4. 20. kV 10 V 19 V b g denotes the benefit reserve at the end of year k.08 Calculate 11V. ….….0 = 0.100 41. = 5.8 5.700 46.

200 0. Continuous single life annuities paying 100 per year are available for (30) and (40) with actuarial present values of 1200 and 1000. (A) (B) (C) (D) (E) 518 549 638 732 799 112. 2 (ii) (iii) i = 0. For a special fully discrete 3-year term insurance on ( x ) : (i) ⎧0 ⎪ bk +1 = ⎨ ⎪1. (A) (B) (C) (D) (E) 1400 1500 1600 1700 1800 67 . 000 (11 − k ) ⎩ k 0 1 2 qx + k 0.097 for k = 0 for k = 1. and 50 while (40) is alive but (30) is dead.100 0.06 Calculate the level annual benefit premium for this insurance. Calculate the actuarial present value of a two-life continuous annuity that pays 100 while at least one of them is alive. The actuarial present value of this annuity is 1180. respectively.111. 70 while (30) is alive but (40) is dead. A continuous two-life annuity pays: 100 while both (30) and (40) are alive.

That is.200 38. (ii) f (t ) = te − t .000 114.05 Calculate the actuarial present value of the disability payments at the time of disability.400 37. (A) (B) (C) (D) (E) 36. you are given: (i) t 0 1 2 (ii) i = 0.90 0. The length of the payment period in years is a random variable with the gamma distribution with parameters α = 2 and θ = 1 .113. For a special 3-year temporary life annuity-due on (x). For a disability insurance claim: (i) The claimant will receive payments at the rate of 20.100 39.06 Annuity Payment 15 20 25 px + t 0.95 0. (A) (B) (C) (D) (E) 91 102 114 127 139 68 . δ = 0.000 per year. t > 0 (iii) (iv) Payments begin immediately.200 40. payable continuously as long as she remains disabled.85 Calculate the variance of the present value random variable for this annuity.

43 0.115. Calculate 1 L . For a population of individuals. Calculate the probability that an individual drawn at random from this population dies within one year. For a fully discrete 3-year endowment insurance of 1000 on (x). (A) (B) (C) (D) (E) 0. you are given: (i) (ii) (iii) (iv) kL is the prospective loss random variable at time k. given that (x) dies in the second year from issue. (A) (B) (C) (D) (E) 540 630 655 720 910 116. i = 0. you are given: (i) (ii) Each individual has a constant force of mortality.70182 Premiums are determined by the equivalence principle.10 && ax:3 = 2.37 0.50 0.63 69 . The forces of mortality are uniformly distributed over the interval (0.57 0.2).

For a double-decrement model: (i) p' ( ) = 1 − 40 1 t t .050 0.500 7. 40 0 ≤ t ≤ 40 ( Calculate μ 40) ( 20 ) .025 0. τ (A) (B) (C) (D) (E) 0. For a special fully discrete 3-year term insurance on b x g : (i) (ii) Level benefit premiums are paid at the beginning of each year.117.000 qx + k 0. (A) (B) (C) (D) (E) 6. 60 0 ≤ t ≤ 60 (ii) t p' (40) = 1 − 2 t .03 0.300 70 .09 Calculate the initial benefit reserve for year 2.07 118.038 0.063 0. (iii) k 0 1 2 i = 0.06 0.000 150.500 8.400 10.06 bk +1 200.000 100.100 9.

For a 4-year college.05 q3 = 0. Death benefits are given by bt = 1 + i where i is the interest rate. For a special fully continuous whole life insurance on (x): (i) (ii) (iii) (iv) The level premium is determined using the equivalence principle. Which of the following expressions is equal to L ? (A) (B) (C) (D) cν − A h c1 − A h cν − A hc1 + A h cν − A h c1 + A h cν − A hc1 − A h T x x T x x T x x T x x (E) dv + A i c1 + A h T x x 120.119.5-year complete expected college lifetime of a student entering the second year. b g t L is the loss random variable at t = 0 for the insurance. T is the future lifetime random variable of (x). o 71 . Compute the temporary 1. you are given the following probabilities for dropout from all causes: . q0 = 015 . e115 .01 Dropouts are uniformly distributed over each year. q1 = 010 q2 = 0. :.

000 with death benefit payable at the end of the year of death.25 1.35 1. The single contract premium at age 63 is 5233.030 0.45 121. The company calculates benefit premiums using: (i) (ii) mortality based on the Illustrative Life Table.050 72 . age 63.040 0. Lee.045 0.05 The company calculates contract premiums as 112% of benefit premiums. considers the purchase of a single premium whole life insurance of 10. (A) (B) (C) (D) (E) 0.30 1.40 1.(A) (B) (C) (D) (E) 1. i = 0. Calculate the minimum annual rate of return that the investment must earn to accumulate to an amount equal to the single contract premium at age 65. Lee decides to delay the purchase for two years and invests the 5233.035 0.

0125 0. (A) 0. and each life has a constant force of mortality with μ = 0. (iii) δ = 0. For independent lives (35) and (45): (i) (ii) (iii) (iv) 5 p35 = 0.093 0.03 q50 = 0. (A) (B) (C) (D) (E) 0.020 0.039 0.0105 0.122. The future lifetimes of (x) and (y) are independent. Calculate the increase in the actuarial present value over what you originally calculated.0135 73 .80 5 q40 = 0.109 0.02. You assumed: (i) (ii) The death benefit is payable at the moment of death. You have calculated the actuarial present value of a last-survivor whole life insurance of 1 on (x) and (y). Each mortality assumption is correct.0095 (B) (C) (D) (E) 0.0115 0.90 p45 = 0.05 Calculate the probability that the last death of (35) and (45) occurs in the 6th year. but each includes a common shock component with constant force 0.06 .163 123.05 Your supervisor points out that these are not independent future lifetimes.

(A) (B) (C) (D) (E) 2.0 74 . T (ii) 0 ≤ t <1 1≤ t < 2 2≤t Claims amounts Yi are independently and identically distributed random variables that are also independent of N (t ) .0 3.5 4.800]. Each Yi is uniformly distributed on [200.0 2. The random variable Q is the number of claims with claim amount greater than 500 by time t = 3. R is the conditional expected value of P. |3. given Q = 4. (iii) (iv) (v) (vi) Calculate R. | λ ( t ) = S2.5 3. The random variable P is the number of claims with claim amount less than 500 by time t = 3.124. t ≥ 0 is a nonhomogeneous Poisson process with intensity function: m bg r R1. For a claims process. you are given: (i) The number of claims N t .

using the normal approximation. the level premium π is paid. (iii) (iv) (v) (vi) Calculate the initial amount of the fund.2. With probability 0. such that the probability that the fund is sufficient to make all payments is 95%. i = 0. You are given: (i) (ii) There are 100 winners each age 40. At the start of each year. while (25) is alive. The lifetimes are independent. The random drawings are independent. Calculate the benefit reserve at the end of year 10. the death benefit is 0. beginning immediately. With probability 0. no premium is paid.50 30.8. Mortality follows the Illustrative Life Table. including the first.125.25 126. Mortality follows the Illustrative Life Table. payable annually.25 20. Lottery Life issues a special fully discrete whole life insurance on (25): (i) At the end of the year of death there is a random drawing. With probability 0.00 51. A government creates a fund to pay this year’s lottery winners. (A) (B) (C) (D) (E) 10. i = 0.06 (ii) (iii) (iv) (v) (vi) π is determined using the equivalence principle. With probability 0. Each winner receives payments of 10 per year for life.2. there is a random drawing.06 The amount of the fund is determined.8.75 41. the death benefit is 1000. 75 .

The initial benefit premium paid during the each of the first 20 years is one fifth of the benefit premium paid during each of the 15 subsequent years.(A) (B) (C) (D) (E) 14. For a special fully discrete 35-payment whole life insurance on (30): (i) (ii) The death benefit is 1 for the first 20 years and is 5 thereafter.150 15.32307 (iii) (iv) (v) (vi) && a30: 35 = 14.050 15.06 A30:20 = 0.030 76 .025 0. (A) (B) (C) (D) (E) 0.010 0.250 127.020 0. Mortality follows the Illustrative Life Table. i = 0.800 14.835 Calculate the initial annual benefit premium.900 15.015 0.

(A) (B) (C) (D) (E) 0.05 q y = 010 . Calculate 0.1088 0.75 q xy . Per policy expenses are 25 per year.1097 0. 1000 P35 = 8.50 per year. Deaths are uniformly distributed over each year of age. For independent lives (x) and (y): (i) (ii) (iii) q x = 0.1116 0.128. For a fully discrete whole life insurance of 100.1106 0.000 on (35) you are given: (i) (ii) (iii) (iv) (v) Percent of premium expenses are 10% per year. All expenses are paid at the beginning of the year. Per thousand expenses are 2.36 Calculate the level annual expense-loaded premium using the equivalence principle.1125 129. (A) (B) (C) (D) (E) 930 1041 1142 1234 1352 77 .

000 in the actuarial lottery. If she takes up hot air ballooning for the coming year. A person age 40 wins 10. she will have a constant force of mortality of 0.00 78 .60 0.35 0.30 A50 = 0.09 Calculate K.04 A40 = 0. (A) (B) (C) (D) (E) 0.1. (A) (B) (C) (D) (E) 538 541 545 548 551 131. her assumed mortality will be adjusted so that for the coming year only. age 25. Rather than receiving the money at once. follows De Moivre’s law with ω = 100. You are given: (i) (ii) (iii) (iv) i = 0.35 1 A40: 10 = 0.130.10 0. Mortality for Audra. the winner is offered the actuarially equivalent option of receiving an annual payment of K (at the beginning of each year) guaranteed for 10 years and continuing thereafter for life. Calculate the decrease in the 11-year temporary complete life expectancy for Audra if she takes up hot air ballooning.80 1.

02 0 0 1 2 3 4 5 bg (B) 0. (iii) All the graphs show μ x t on the vertical axis and t on the horizontal axis.02 0 0 1 2 3 4 5 0.08 (C) 0.04 0.06 0.04 0.02 0 0 1 2 3 4 5 79 .06 0.06 0.02 0 0 1 2 3 4 5 (E) 0. All the graphs below are to the same scale.08 0. For a 5-year fully continuous term insurance on (x): (i) (ii) δ = 010 .06 0.06 0.08 0.08 0. Which of the following mortality assumptions would produce the highest benefit reserve at the end of year 2? (A) 0.08 0.04 0.04 0.04 0.02 0.00 0 1 2 3 4 5 (D) 0.132.

The occurrences of poison in the glasses and the number of glasses drunk are independent events. you are given: (i) Decrement 1 is death. decrement 2 is disability. 80 .100 134. and decrement 3 is withdrawal. ′ Withdrawals occur only at the end of the year. Assassins attempt to poison the king’s wine glasses. For a multiple decrement table. Drinking poisoned wine is always fatal instantly and is the only cause of death.010 ′ q60( 2 ) = 0.091 0.133.050 ′ q60( 3) = 0100 . Mortality and disability are uniformly distributed over each year of age in the associated single decrement tables. Calculate the probability that the current king survives at least 30 days. Kings of Fredonia drink glasses of wine at a Poisson rate of 2 glasses per day.094 0. (A) (B) (C) (D) (E) 0.097 0. q60(1) = 0.088 0. bg bg bg (ii) (iii) (iv) (v) (vi) (3 Calculate q60) .01 probability that any given glass is poisoned. There is a 0.

044 13.839 61 79.575 76.6 . the death benefit is doubled. Calculate the single benefit premium for this insurance.402 77. You are given the following extract from a select-and-ultimate mortality table with a 2year select period: x lx l x +1 lx+2 x+2 62 63 64 60 80. If death occurs by accident during the first 30 years.622 13.137 78.625 79.765 12.000 on (x).235 136. t ≥ 0 t ≥ 0. bg μ b g bt g = 0. (A) (B) (C) (D) (E) 11. you are given: (i) (ii) (iii) (iv) (v) δ = 0. 1 x μ bxτ g t = 0. For a special whole life insurance of 100.195 12. Calculate 0.60 135.55 0.252 62 77. where μ bx1g is the force of decrement due to death by accident.(A) (B) (C) (D) (E) 0.954 78.45 0. 81 .50 0.770 75.06 The death benefit is payable at the moment of death.9 q 60 + 0.578 Assume that deaths are uniformly distributed between integral ages.40 0.001.008.

Each approved application has a 20% chance of being from a smoker and an 80% chance of being from a non-smoker. The insurances are priced so that the expected loss on each approval is –100.0103 0.100.000 17.0102 0.0104 0.000. (A) (B) (C) (D) (E) 13.0105 0.(A) (B) (C) (D) (E) 0.300. The variance of the loss amount is 5000 for a smoker and is 8000 for a nonsmoker.000 14. Insurance losses are a compound Poisson process where: (i) The approvals of insurance applications arise in accordance with a Poisson process at a rate of 1000 per day.200.0106 137. (ii) (iii) (iv) Calculate the variance for the total losses on one day’s approvals.000 82 .000 15.000 16.400.

b g (A) (B) (C) (D) (E) 34. such that the probability is less than 0.000 on (30): (i) π denotes the annual premium and L π denotes the loss-at-issue random variable for this insurance.20 qxb2g ′ y 2y 139.06 Calculate the lowest premium.bτ 138.10 -- q x b1g ′ 0.1 83 . For a fully discrete whole life insurance of 10.5 that the loss L π ′ is positive. i=0.24 -- b q x2 g 0.6 36.25 0.8 39. For a double decrement table with l40g = 2000: x 40 41 bτ Calculate l42 g . (A) (B) (C) (D) (E) 800 820 840 860 880 b q x1g 0. bg (ii) (iii) Mortality follows the Illustrative Life Table.0 39.6 36. π ′ .

**140. Y is the present-value random variable for a special 3-year temporary life annuity-due on
**

(x). You are given: (i) (ii)

t

px = 0.9t , t ≥ 0

K is the curtate-future-lifetime random variable for (x).

(iii)

. R100, |187, Y=S. |2.72, T

K =0 K =1 K = 2,3,....

Calculate Var(Y). (A) (B) (C) (D) (E) 0.19 0.30 0.37 0.46 0.55

**141. Z is the present-value random variable for a whole life insurance of b payable at the
**

moment of death of (x). You are given: (i) (ii) (iii)

δ = 0.04 μ x ( t ) = 0.02 ,

t≥0

The single benefit premium for this insurance is equal to Var(Z).

Calculate b. (A) (B) (C) (D) (E) 2.75 3.00 3.25 3.50 3.75

84

**142. For a fully continuous whole life insurance of 1 on (x):
**

(i) (ii) (iii) (iv) (v) (vi)

**π is the benefit premium.
**

L is the loss-at-issue random variable with the premium equal to π . L* is the loss-at-issue random variable with the premium equal to 1.25 π . a x = 5.0

δ = 0.08

Var L = 0.5625

bg

Calculate the sum of the expected value and the standard deviation of L*.

(A) (B) (C) (D) (E)

0.59 0.71 0.86 0.89 1.01

**143. Workers’ compensation claims are reported according to a Poisson process with mean
**

100 per month. The number of claims reported and the claim amounts are independently distributed. 2% of the claims exceed 30,000. Calculate the number of complete months of data that must be gathered to have at least a 90% chance of observing at least 3 claims each exceeding 30,000. (A) (B) (C) (D) (E) 1 2 3 4 5

85

**144. For students entering a three-year law school, you are given:
**

(i) The following double decrement table: For a student at the beginning of that academic year, probability of Survival Withdrawal for Through All Other Academic Academic Year Reasons Failure -0.20 0.40 -0.30 -0.60 ---

Academic Year 1 2 3

(ii) (iii)

Ten times as many students survive year 2 as fail during year 3. The number of students who fail during year 2 is 40% of the number of students who survive year 2.

Calculate the probability that a student entering the school will withdraw for reasons other than academic failure before graduation.

(A) (B) (C) (D) (E)

Less than 0.35 At least 0.35, but less than 0.40 At least 0.40, but less than 0.45 At least 0.45, but less than 0.50 At least 0.50

86

2 9. receive 10.64 11.145.40 2 Ax = 0. is 0.06 Ax = 0.4 9. 0 ≤ t ≤1 t >1 (iii) M e25 = 10. (A) (B) (C) (D) (E) 9. Given: (i) Superscripts M and N identify two forces of mortality and the curtate expectations of life calculated from them.000 per year continuously until death.90 that the fund will be sufficient to provide the payments.10 87 .5 9.25 Calculate the amount (in millions) needed in the fund so that the probability. bt g = |μ bbttgg + 01* b1 − t g S | T M 25 M 25 N e25 .74 9.0 Calculate (A) (B) (C) (D) (E) 9.6 146.30 10.96 10. using the normal approximation.3 9. A fund is established to pay annuities to 100 independent lives age x. N μ 25 (ii) Rμ . You are given: (i) (ii) (iii) Each annuitant will δ = 0.

Deaths are uniformly distributed within each year of age. For a special 3-year term insurance on (30). are: k 0 1 2 (iv) (v) (vi) bk +1 1000 500 250 Mortality follows the Illustrative Life Table. you are given: (i) (ii) (iii) Premiums are payable semiannually. i = 0.06 Calculate the amount of each semiannual benefit premium for this insurance. (A) (B) (C) (D) (E) 1.6 1. Premiums are payable only in the first year.4 1. payable at the end of the year of death. Benefits.7 88 .5 1.3 1.147.

Job offers for a college graduate arrive according to a Poisson process with mean 2 per month. You are given: (i) i=0.000. (A) (B) (C) (D) (E) 0.4 11. .0 12. insurance is P. for k=0.7 12.39 0. Wages offered are mutually independent and follow a lognormal distribution with μ = 1012 and σ = 012 .3 149.1 11.1.19.….45 0. For . (A) (B) (C) (D) (E) 11. For this same mortality table.2.27 0.58 0.61 89 . the single benefit premium for this .2 . the lognormal distribution. except that q80 = 01 . A job offer is acceptable if the wages are at least 28. the single benefit premium for this insurance is 13.148.06 (ii) For a certain mortality table with q80 = 0. A decreasing term life insurance on (80) pays (20-k) at the end of the year of death if (80) dies in year k+1. F ( x) = Φ ⎛ ln x − μ ⎞ ⎜ ⎟ ⎝ σ ⎠ where Φ( z ) is the cdf of the standard normal distribution. (iii) Calculate P. Calculate the probability that it will take a college graduate more than 3 months to receive an acceptable job offer.

65 0. For a Markov model with three states.10 ⎤ ⎢ 0. Their future states are independent.10 0.70 0. Calculate the variance of the number of the original 100 lives who die within the first two years.20 0. (A) (B) (C) (D) (E) 30 31 32 33 34 151.25 ⎥ ⎢ ⎥ ⎢0 0 1 ⎥ ⎣ ⎦ There are 100 lives at the start. all Healthy.150. Disabled (1). (A) (B) (C) (D) (E) 11 14 17 20 23 90 . 100 − x 0 ≤ x < 100 o Calculate e50:60 . For independent lives (50) and (60): μ x = bg 1 . and Dead (2): (i) The annual transition matrix is given by 0 0 1 2 (ii) 1 2 ⎡ 0. Healthy (0).

152. (A) (B) (C) (D) (E) 440 528 634 712 803 91 . The death benefit is 1000.5 0 0. Calculate the actuarial present value of the prospective death benefits at the beginning of year 2. i = 0. payable at the end of the year of death.2 0. are given the following homogenous Markov chain model: (i) State 1: active State 2: disabled State 3: withdrawn State 4: dead You Transition probability matrix: 1 2 3 4 1 ⎡ 0.1⎤ 2 ⎢ 0.4 0. An insurance company issues a special 3-year insurance to a high risk individual.2 0.3 0.05 The insured is disabled at the end of year 1.3⎥ ⎢ ⎥ 3 ⎢0 0 1 0⎥ ⎢ ⎥ 4 ⎣0 0 0 1⎦ (ii) (iii) (iv) (v) Changes in state occur at the end of the year.

000 454. (A) (B) (C) (D) (E) 277. For a fully discrete three-year endowment insurance of 10.000 303. && a65 = 9. (A) 1.6 1. you are given: (i) (ii) (iii) (iv) (v) i = 0.000 403.11 10.7 92 .153.03 1000q50 = 8.07 Calculate the single benefit premium for this special deferred annuity. For a special 30-year deferred annual whole life annuity-due of 1 on (35): (i) If death occurs during the deferral period.5 1. Calculate the variance of 0 L .000 1V50:3 = 3209 10. based on the benefit premium.000 357.90 (ii) (iii) (iv) A35:30 = 0.000 154.3 (B) (C) (D) (E) 1.4 1.000 2V50:3 = 6539 (vi) 0 L is the prospective loss random variable at issue.32 1000q51 = 9.000 on (50).21 1 A35:30 = 0. the single benefit premium is refunded without interest at the end of the year of death.

02904 i = 0.00 0. (A) (B) (C) (D) (E) -0.4 bg x≥0 p0 = 0.155.03 The initial benefit reserve for policy year 10 is 343.20 -0.65976 Calculate the terminal benefit reserve for policy year 9. For a fully discrete whole life insurance of b on (x). && ax = 14. (A) (B) (C) (D) (E) 280 288 296 304 312 93 . 0.20 156. you are given: (i) (ii) (iii) (iv) (v) qx +9 = 0.50 Calculate F. Given: (i) (ii) μ x = F + e2 x . The net amount at risk for policy year 10 is 872.09 0.09 0.

700 13.157.600 14.736.06 Calculate the level annual premium using the equivalence principle. you are given: (i) (ii) (iii) The first year benefit premium is 668.500 16. d = 0. k = 0. Mortality follows the Illustrative Life Table.…. you are given: (i) (ii) (iii) (iv) (v) bk +1 = 100.9 Benefits are payable at the end of the year of death. The second year benefit premium is 258.500 15. (A) (B) (C) (D) (E) 469 479 489 499 509 158.000 (1 + k ) . 1. For an increasing 10-year term insurance.06 The single benefit premium for this insurance on (41) is 16. Calculate the single benefit premium for this insurance on (40).300 94 . i = 0. For a special fully discrete 2-year endowment insurance of 1000 on (x). (A) (B) (C) (D) (E) 12.

1. q '(40)+ k = 0. which occurs at the end of the year. death and withdrawal: (i) (ii) (iii) (iv) (v) Decrement 1 is death. The annual benefit premium is 80. (A) (B) (C) (D) (E) 17 18 19 20 21 160. t≥0 Decrement 2 is withdrawal.02 . The annual contract premium is 100.95 Calculate the actuarial present value of the death benefits for this insurance. Expenses in year 1. Calculate the asset share at the end of the first year. are 40% of contract premiums. (1 μ 40) ( t ) = 0. For a fully discrete whole life insurance of 1000 on (x): (i) (ii) (iii) (iv) (v) (vi) (vii) Death is the only decrement. 2 v = 0.000 on (40) is based on a double-decrement model.04 . 2 k = 0. i = 0. payable at the start of the year. 95 . A fully discrete 3-year term insurance of 10.10 10001Vx = 40 The asset share at time 0 is 0.159.

You are given: (i) (ii) (iii) e30:40 = 27. Calculate Var (T ( 30 ) ) . 0 ≤ x ≤ω T ( x ) is the future lifetime random variable for (x).(A) (B) (C) (D) (E) 487 497 507 517 527 161. (A) (B) (C) (D) (E) 332 352 372 392 412 96 .692 s ( x) = 1− x o ω .

1.… k = 1. Into which of the following ranges does ex: y . the curtate expectation of life of the last survivor status.162. the benefit reserve at the end of year 2.7 < ex: y ≤ 27.7 < ex: y 97 . 1.7 27. k = 0.15 each. 3… pxy = 1.7 28.02 k px k p y . For a fully discrete 5-payment 10-year decreasing term insurance on (60). qx + k = q y + k = 0.…. 2.7 25.05 . You are given: (i) (ii) (iii) T ( x ) and T ( y ) are not independent.7 < ex: y ≤ 26. 2. you are given: (i) (ii) (iii) (iv) bk +1 = 1000 (10 − k ) .….7 < ex: y ≤ 28.001 k . 2. 2. fall? (A) (B) (C) (D) (E) ex: y ≤ 25. 9 Level benefit premiums are payable for five years and equal 218. i = 0.06 k = 0. q60+ k = 0. (A) 70 (B) (C) (D) (E) 72 74 76 78 163.02 + 0.7 26. 1. 9 Calculate 2V . k k = 0.

25% of the trains are express and 75% are local. The types and number of trains arriving are independent. Subway trains arrive at your station at a Poisson rate of 20 per hour. (A) (B) (C) (D) (E) 78 82 86 90 94 98 . You are both waiting at the same station. given that a local arrives first. Beginning with the first full moon in October deer are hit by cars at a Poisson rate of 20 per day. (A) (B) (C) (D) (E) 37% 40% 43% 46% 49% 165. The number hit and the times until they are discovered are independent. An express gets you to work in 16 minutes and a local gets you there in 28 minutes. Your co-worker always takes the first express. Calculate the expected number of deer that will be discovered in the first 10 days following the first full moon in October.164. Calculate the conditional probability that you arrive at work before your co-worker. The time between when a deer is hit and when it is discovered by highway maintenance has an exponential distribution with a mean of 7 days. You always take the first train to arrive.

63 0.79 Future employment with XYZ follows a double ( ) 167. (50) is an employee of XYZ Corporation.166.56 0. 99 . he will never rejoin XYZ.03 0≤t <5 5≤t If (50) leaves employment with XYZ. (1 μ50) ( t ) = ⎨ ⎧0.05 ⎩0.00 ⎩0.05 t≥0 T(x) is the future lifetime random variable. You are given: (i) (ii) (iii) (iv) μ x ( t ) = 0.68 0.53 0. Calculate Pr aT ( x ) > ax − g . g is the standard deviation of aT ( x ) . (A) (B) (C) (D) (E) 0. decrement model: (i) (ii) (iii) (iv) (v) Decrement 1 is retirement.03 . (2 μ50 ) ( t ) = ⎨ ⎧0.02 0≤t <5 5≤t Decrement 2 is leaving employment with XYZ for all other causes. δ = 0. Calculate the probability that (50) will retire from XYZ before age 60.

1 8.084 0.(A) (B) (C) (D) (E) 0. Calculate e[81] .2 8.089 168. you are given: (i) x 80 81 (ii) l[ x] 1000 920 d[ x] 90 90 l x +1 − − e[ x] o 8.079 0.074 0.3 8.5 − Deaths are uniformly distributed over each year of age. For a life table with a one-year select period.0 8. o (A) (B) (C) (D) (E) 8.4 100 .069 0.

05 (v) (vi) Calculate the level expense-loaded premium using the equivalence principle.05 px = px +1 = 0. All expenses. (A) (B) (C) (D) (E) 27 28 29 30 31 101 . you are given: (i) (ii) (iii) (iv) The annual per policy expense is 1. For a fully discrete 3-year endowment insurance of 1000 on (x): (i) (ii) i = 0. Mortality follows De Moivre’s law with ω = 100 . (A) (B) (C) (D) (E) 526 632 739 845 952 170. The claim settlement expense of 50 is payable when the claim is paid. are paid at the beginning of the year. There is an additional first year expense of 15.7 Calculate the second year terminal benefit reserve. except the claim settlement expense.169. For a fully discrete whole life insurance of 1000 on (50). i = 0.

For a special fully discrete 5-year deferred whole life insurance of 100.04042 Calculate the annual benefit premiums.39 0.38 0.05 ⎩0.000 on (40).06 (ii) (iii) (iv) (v) ( IA)140:5 = 0.44 172.43 0. You are given: μ ( x) = ⎨ ⎧0. 3300 (A) (B) (C) (D) (E) 3320 3340 3360 3380 102 . 0.41 0. Annual benefit premiums are payable only during the deferral period.04 50 ≤ x < 60 60 ≤ x < 70 Calculate (A) (B) (C) (D) (E) 4 14 q50 . Mortality follows the Illustrative Life Table. you are given: (i) The death benefit during the 5-year deferral period is return of benefit premiums paid without interest. i = 0.171.

02 for t ≤ 10 ⎩0.03 μ x ( t ) = 0.82 0.01 for t > 10 Calculate the expected loss at issue for ABC (using the revised mortality assumption) as a percentage of the contract premium.500 84.000 if only one person is alive. Company ABC sets the contract premium for a continuous life annuity of 1 per year on (x) equal to the single benefit premium calculated using: (i) (ii) δ = 0.300 80.173.02 .400 82.91 0. annuity pays 30. a revised mortality assumption reflects future mortality improvement and is given by μx (t ) = ⎨ ⎧0. both age 80.000 if both persons are alive and 20. You are given: (i) k 1 2 3 (ii) i = 0. (A) (B) (C) (D) (E) 78. t≥0 However.05 k The p80 0.800 174. You are pricing a special 3-year annuity-due on two independent lives.700 86.72 Calculate the actuarial present value of this annuity. 103 .

with: (i) Benefits: k 0 1 (ii) (iii) bk +1 1000 500 Mortality follows the Illustrative Life Table. i = 0.06 The actual experience of the fund is as follows: k 0 1 Interest Rate Earned 0.070 0. A group of 1000 lives each age 30 sets up a fund to pay 1000 at the end of the first year for each member who dies in the first year. at the end of the second year. and 500 at the end of the second year for each member who dies in the second year. Each member pays into the fund an amount equal to the single benefit premium for a special 2-year term insurance.069 Number of Deaths 1 1 Calculate the difference.(A) (B) (C) (D) (E) 2% 8% 15% 20% 23% 175. (A) (B) (C) (D) (E) 840 870 900 930 960 104 . between the expected size of the fund as projected at time 0 and the actual fund.

080 0.075 0. For a whole life insurance of 1 on (x).02. 105 . Level premiums are payable at the beginning of each year.095 177.085 0. (A) (B) (C) (D) (E) 0. you are given: (i) (ii) (iii) (iv) (v) (vi) Benefits are payable at the moment of death.03t . i = 0.090 0. Death benefits are paid at the moment of death.08 bt = e0. For a special whole life insurance on (x). you are given: (i) (ii) (iii) (iv) (v) Z is the present value random variable for this insurance. t≥0 t≥0 Calculate Var ( Z ) . Deaths are uniformly distributed over each year of age. δ = 0.176. μ x ( t ) = 0.10 && ax = 8 && ax +10 = 6 Calculate the 10th year terminal benefit reserve for this insurance.

27 0.(A) (B) (C) (D) (E) 0. (iii) δ = 0.001.18 0. 1 x t ≥ 0 . This provision pays during the first ten years an additional benefit of 100.06 Calculate the single benefit premium for this insurance.30 178. (A) (B) (C) (D) (E) 1640 1710 1790 1870 1970 106 .000 at the moment of death for death by accidental means.000 payable at the moment of death of (x) includes a double indemnity provision. where μ bx1g is the force of decrement due to death by accidental means.0002. A special whole life insurance of 100. t ≥ 0 (i) (ii) bg μ b g bt g = 0.26 0.25 0. You are given: μ bxτ g t = 0.

Q61 is the transition matrix from age 61 to 62.08 ⎞ ⎜ ⎟ 1.00 ⎜ 0 0 1.60 0.16 0.28 0. (iii) Calculate Q61 . ⎛1.00 ⎟ ⎝ ⎠ ⎛ 0.20 0.00 0 ⎟ ⎜ 0 ⎜ 0 0 1.56 0.00 ⎟ ⎝ ⎠ ⎛ 0.12 0.70 0. (a) (b) Q60 is the transition matrix from age 60 to 61.12 0. The two models produce equal probabilities of decrement.00 ⎟ ⎝ ⎠ ⎛ 0.80 0.00 ⎟ ⎝ ⎠ (A) (B) (C) (D) (E) 107 .00 0. Kevin and Kira are modeling the future lifetime of (60).10 ⎞ ⎜ ⎟ 1.00 ⎟ ⎝ ⎠ ⎛ 0.16 0.08 ⎞ ⎜ ⎟ ⎜ 0. 1 (death due to cause 1).08 ⎞ ⎜ ⎟ 0 ⎟ ⎜ 0 1.179.08 ⎟ ⎜ 0 0 1.00 ⎜ 0 0 1.12 ⎞ ⎜ ⎟ 0 ⎟ ⎜ 0 1.76 0. 2 (death due to cause 2). (i) Kevin uses a double decrement model: (τ x lx ) 60 61 (ii) 1000 800 ( dx ) 1 (2 dx ) 120 160 80 80 62 560 − − Kira uses a non-homogeneous Markov model: The states are 0 (alive).00 0 ⎟ ⎜ 0 ⎜ 0 0 1.

7 0..7 0..05 0 ⎞ ⎜ ⎟ Q2 = ⎜ 0.2 ⎟ ⎜ 0 0 1 ⎟ ⎝ ⎠ ⎛ 0. (A) (B) (C) (D) (E) 0.49 0.47 0.95 0. A certain species of flower has three states: sustainable. ⎜ 0 0 1⎟ ⎝ ⎠ Calculate the probability that a species endangered at time 0 will ever become extinct. Transitions between states are modeled as a non-homogeneous Markov chain with transition matrices Qi as follows: ⎛ Sustainable ⎜ ⎜ Q0 = Endangered⎜ ⎜ Extinct ⎜ ⎝ Sustainable Endangered Extinct ⎞ 0.45 0.3 ⎟ 0 0 1 ⎟ ⎟ ⎠ ⎛ 0.1 0.1 0 ⎞ ⎜ ⎟ Q1 = ⎜ 0.5 0.2 0.15 0 ⎟ ⎟ 0 0. i = 3.5 0 ⎟ . endangered and extinct.53 108 . 4..95 0.9 0.180.1⎟ ⎜ 0 0 1 ⎟ ⎝ ⎠ ⎛ 0.05 0 ⎞ ⎜ ⎟ Qi = ⎜ 0.51 0.85 0.7 0.

(A) (B) (C) (D) (E) 9.1 0. Customers arrive at a bank according to a Poisson process at the rate of 100 per hour. 109 . Using the normal approximation.0 Disabled 0.1 0.000 10.10 (iii) (iv) Calculate the level annual benefit premium for this insurance. All insureds are initially active.7 0. disabled.0 Dead 0. calculate the probability that for an 8-hour day the total withdrawals of the bank will exceed the total deposits. The annual transition probabilities are as follows: Active Active Disabled Dead (ii) 0.700 11.8 0.000 benefit is payable at the end of the year of death whether the insured was active or disabled. 20% of them make only a deposit.800 13.800 182. Withdrawal amounts have mean 5000 and standard deviation 2000.0 A 100. The number of customers and their activities are mutually independent. d = 0. Deposit amounts are distributed with mean 8000 and standard deviation 1000. 30% make only a withdrawal and the remaining 50% are there only to complain.181.2 1.1 0. Insureds do not pay any annual premiums when they are disabled.200 20. Premiums are paid at the beginning of each year when active. For a special 3-year term insurance: (i) Insureds may be in one of three states at the beginning of each year: active. or dead.

20 0.15 0. Once a battery is activated.39 183. its future lifetime is exponential The first battery is activated when the probe lands on Mars. The second battery is activated when the first fails.30 0.36 0. Calculate the probability that the probe is transmitting data three years after landing. A Mars probe has two batteries. (A) (B) (C) (D) (E) 0. The probe transmits data until both batteries have failed.25 110 .05 0.10 0. Battery lifetimes after activation are independent.27 0. with mean 1 year.(A) (B) (C) (D) (E) 0.33 0.

3 17. For a special fully discrete 30-payment whole life insurance on (45). i = 0.8 (A) (B) (C) (D) (E) 17. you are given: (i) The death benefit of 1000 is payable at the end of the year of death.3 18. k = 1.184. 2 .08 px + k −1 = 0.8 185.06 (iii) (iv) Calculate π . The death benefit for year k is (1000k ) plus the benefit reserve at the end of year k. 16.8 18.9. 2 Calculate π . k = 1. i = 0. Mortality follows the Illustrative Life Table. (iii) (iv) (v) π is the level annual benefit premium. (A) (B) (C) (D) (E) 1027 1047 1067 1087 1107 111 . (ii) The benefit premium for this insurance is equal to 1000P45 for the first 15 years followed by an increased level annual premium of π for the remaining 15 years. For a special fully discrete 2-year endowment insurance on (x): (i) (ii) The pure endowment is 2000.

For a group of 250 individuals age x.06 Using the normal approximation.186. you are given: Age 40 41 42 ( lx ) 1000 τ ( dx ) 60 1 ( dx ) 55 2 − 750 − − 70 − Each decrement is uniformly distributed over each year of age in the double decrement table. (A) (B) (C) (D) (E) 1.1774113 i = 0.63 million 1.53 million 1.83 million 187.369131 2 Ax = 0. Each individual is paid 500 at the beginning of each year. if living.43 million 1. calculate the size of the fund needed at inception in order to be 90% certain of having enough money to pay the life annuities. For a double decrement table. Ax = 0.73 million 1. 112 . ′(1 Calculate q41 ) . you are given: (i) (ii) (iii) (iv) (v) The future lifetimes are independent.

Calculate the original value of α .081 188. A senior actuary examining mortality tables for pencil sharpeners has determined that the original value of α must change.077 0. You are given: (i) (ii) The new complete expectation of life at purchase is half what it was previously. for α α > 0 and 0 ≤ x ≤ ω .(A) (B) (C) (D) (E) 0.079 0.078 0. The actuarial department for the SharpPoint Corporation models the lifetime of pencil sharpeners from purchase using a generalized DeMoivre model with s ( x ) = (1 − x / ω ) . (iii) ω remains the same.25 times the previous force of mortality for all durations. (A) (B) (C) (D) (E) 1 2 3 4 5 113 . The new force of mortality for pencil sharpeners is 2.080 0.

(A) (B) (C) (D) (E) 2.10) Calculate E [ X ] .6 5. For a fully discrete 15-payment whole life insurance of 100.4 6.5 10.0 190.3 9. You are given: (i) (ii) (iii) (iv) T is the future lifetime random variable. Calculate K. t≥0 X = min(T .35 d = 0. Percent of premium expenses are 10% in the first year and 2% thereafter.189.000 on (x). Var [T ] = 100 .95. 481.97 && ax:15 = 11. 100.02913 Expenses are incurred at the beginning of the year.000 Ax = 51. μ (t ) = μ . Per policy expenses are K in the first year and 5 in each year thereafter until death. 114 . you are given: (i) (ii) (iii) (iv) (v) (vi) (vii) The expense-loaded level annual premium using the equivalence principle is 4669.

deaths occur simultaneously). the joint density function is fT ( x ).30 0.36 0.5 23. T ( y ) (t .0 29. For the future lifetimes of (x) and (y): (i) (ii) With probability 0.(A) (B) (C) (D) (E) 10. Calculate Prob ⎡T ( x ) < T ( y ) ⎤ .6.0005 .. T ( x ) = T ( y ) (i.34 0.0 16.5 36.4. 0 < s < 50 115 .e.5 191. With probability 0.32 0. s ) = 0. ⎣ ⎦ (A) (B) (C) (D) (E) 0.38 0 < t < 40 .

02] . For a population whose mortality follows DeMoivre’s law.0 3.7 42.192.0 116 . (A) (B) (C) (D) (E) 40. you are given: (i) Each member of the group has a constant force of mortality that is drawn from the uniform distribution on [ 0.0 40.3 193. calculate the actuarial present value of a continuous lifetime annuity of 1 per year.1 41.5 4.5 5. (A) (B) (C) (D) (E) 3.01 For a member selected at random from this group.01. 0.5 41. you are given: (i) e40:40 = 3 e60:60 e20:20 = k e60:60 o o o o (ii) Calculate k.0 4. (ii) δ = 0. For a group of lives age x.

(ii) (iii) (iv) (v) μ x ( t ) = μ y ( t ) = 0. (A) (B) (C) (D) (E) 4500 5400 6000 7100 7500 117 .04 Calculate the actuarial present value of this insurance on (x) and (y).06 while both are alive. μ ( t ) = 0. the survivor receives the single benefit premium for a whole life insurance of 10. μ x y ( t ) = 0.000 payable at the moment of death of the survivor.194.12 After the first death.10 for the survivor. For an insurance on (x) and (y): (i) Upon the first death. δ = 0.

(ii) Calculate the conditional probability that both Kevin and Kira are out by the start of round five. For each question.13 0.19 0. and payments increase by 10 every 30 years. with ω = 110 . you are given: (i) (ii) (iii) (iv) (v) Y is the present-value random variable.22 0.16 0. Mortality follows DeMoivre’s law. For a special increasing whole life annuity-due on (40). The payment in year 1 is 10. Kevin’s probability and Kira’s probability of answering that question correctly are each 0.0 12. i = 0.5 12. (A) (B) (C) (D) (E) 10. given that at least one of them participates in round 3.8.5 11. The contest will last at least 5 rounds. Kevin and Kira are in a history competition: (i) In each round. Payments are made once every 30 years.5 118 . A child is out as soon as he or she misses one question. (A) (B) (C) (D) (E) 0.04 Calculate Var (Y ) . beginning immediately.0 11. every child still in the contest faces one question.195. their answers are independent.25 196.

if the insured dies in the third policy year. you are given: (i) The expenses.000 10.20. 0 Le .05 Calculate the value of the expense augmented loss variable. you are given: (iv) (v) (vi) Z is the present-value random variable for this insurance.197.400 10. 119 .02( k + 1) .06 Calculate Var Z . qx + k = 0. 2 The following benefits are payable at the end of the year of death: k 0 1 2 bk+1 300 350 400 (iv) i = 0. k = 0.600 10. i = 0. (A) (B) (C) (D) (E) 9. For a fully discrete whole life insurance of 1000 on (60). 1.800 11.200 bg 198. are: Expense Type % of Premium Per Policy (ii) (iii) First Year 20% 8 Renewal Years 6% 2 The level expense-loaded premium is 41. payable at the beginning of the year. For a special 3-year term insurance on ( x ) .

(A) (B) (C) (D) (E) 770 790 810 830 850 199. you are given: t 22 23 24 1000t V45 235 255 272 q45+t 0. For a fully discrete whole life insurance of 1000 on (45). (A) (B) (C) (D) (E) 279 282 284 286 288 120 .015 0.025 Calculate 100025V45 .020 0.

50). (75.078 0. For a group of lives aged 30.104 0. 0.73 0.69 0.40). s ( x ) .16.112 121 . μ n ( x ) = 0. containing an equal number of smokers and non-smokers. x ≥ 30 x ≥ 30 Calculate q80 for a life randomly selected from those surviving to age 80. Calculate 20 55 q15 55 q35 . 0). you are given: (i) (ii) For non-smokers.77 201. 1). (A) (B) (C) (D) (E) 0.08 . 0. The graph of a piecewise linear survival function.200. consists of 3 line segments with endpoints (0. For smokers. (100. (25.71 0.086 0.095 0. (A) (B) (C) (D) (E) 0.75 0. μ s ( x ) = 0.

7 15. There are no withdrawal benefits.202.1 15. subject to a double decrement model: (i) x 40 41 42 (ii) (iii) (iv) (τ lx ) ( dx ) 1 (2 dx ) 2000 − − 20 30 40 60 50 − Decrement 1 is death.188 124 . (A) (B) (C) (D) (E) 0.177 0.155 0. (A) (B) (C) (D) (E) 14.7 203. i = 0.5 15.05 Calculate the level annual benefit premium for this insurance.08 thereafter. δ = 0. you are given: (i) (ii) The force of mortality is 0. For a fully continuous whole life insurance of 1 on (30).166 0.3 14.05 in the first 10 years and 0.144 0. For a 3-year fully discrete term insurance of 1000 on (40). Decrement 2 is withdrawal.08 Calculate the benefit reserve at time 10 for this insurance.

Tom deposits coins worth a total of 1.000 on Pat: (i) (ii) Death benefits are payable at the moment of death. 5% of the time. Contract premiums of 1600 are payable annually at the beginning of each year for 10 years.000 (A) (B) (C) (D) (E) 205.400 − 12. 15% of the time. Lucky Tom deposits the coins he finds on the way to work according to a Poisson process with a mean of 22 deposits per month. 80% of the time. 20-year term insurance of 100. − 21.000 − 13. (A) (B) (C) (D) (E) 180 210 240 270 300 125 . For a 10-payment.000 − 12.204. The amounts deposited are independent. Calculate the variance in the total of the monthly deposits.000 − 17. (iii) (iv) Calculate the minimum value of L as a function of the time of death of Pat.05 L is the loss random variable at the time of issue. and are independent of the number of deposits. Tom deposits coins worth a total of 5. i = 0. Tom deposits coins worth a total of 10.

206. Michael.000 for death from a stunt accident and nothing for death from other causes. (iii) (iv) Level annual benefit premiums are payable at the beginning of each year. You are given: (i) (ii) x 45 46 47 i = 0. Premiums are determined using the equivalence principle. Calculate the annual benefit premium. The policy pays 500. The benefit is paid at the end of the year of death. He purchases a three-year term insurance policy. (A) (B) (C) (D) (E) 920 1030 1130 1240 1350 126 . age 45.08 (τ lx ) (−s dx ) (s dx ) 2500 2486 2466 10 15 20 4 5 6 (s (−s where d x ) represents deaths from stunt accidents and d x ) represents deaths from other causes. is a professional motorcycle jumping stuntman who plans to retire in three years.

01x ) .207. You are given the survival function s ( x ) = 1 − ( 0. the 50-year temporary complete expectation of life of (30). you are given: (i) (ii) (iii) (iv) 1000 P50 = 25 1000 A61 = 440 1000q60 = 20 i = 0. For a fully discrete whole life insurance of 1000 on (50).06 Calculate 100010V50 . o (A) (B) (C) (D) (E) 27 30 34 37 41 208. 2 0 ≤ x ≤ 100 Calculate e30:50 . (A) (B) (C) (D) (E) 170 172 174 176 178 127 .

you are given: (i) 80 individuals with mutually independent future lifetimes are each to receive a whole life annuity-due.5. The cost of nursing home care is 50.8969 7. calculate the 95th percentile of the distribution of the present value random variable of this portfolio.045 Calculate the actuarial present value of this benefit for a randomly selected insured who has just entered a nursing home.06 (ii) (iii) Age 65 75 Number of annuitants 50 30 Annual annuity payment 2 1 && ax 9. μ . i = 0.23603 0.38681 Using the normal approximation.43980 0. Your company sells a product that pays the cost of nursing home care for the remaining lifetime of the insured. (i) (ii) (iii) (iv) (v) Insureds who enter a nursing home remain there until death.59149 2 Ax 0. δ = 0. for each insured who enters a nursing home is constant. 1]. 128 . μ is uniformly distributed on the interval [0. For a pension plan portfolio.209. The force of mortality.000 per year payable continuously.2170 Ax 0. (A) (B) (C) (D) (E) 1220 1239 1258 1277 1296 210.

You are given: (i) (ii) V1.400 69. are mutually independent.. t > 0 . The time elapsed between claims processed is modeled such that Vk elapsed between processing the k. where t is measured in minutes.(A) (B) (C) (D) (E) 60.2t . Calculate the probability of at least two claims being processed in a ten minute period.800 represents the time 211.5 0.. The pdf of each Vk is f ( t ) = 0.4 0.3 0. ( V1 = time until the first claim is processed).900 65.100 67.6 129 ..2e −0.2 0.800 62. (A) (B) (C) (D) (E) 0.l th and k th claim.V2 .

The probability that any given payout is equal to i is 1/ 2i . 3. A casino has a game that makes payouts at a Poisson rate of 5 per hour and the payout amounts are 1. Until 7:00.… without limit. 2.212.23 0.08 0.13 0. or 3 in a given 20 minute period. You arrive at a subway station at 6:15.28 213. trains arrive at a Poisson rate of 1 train per 30 minutes. Calculate your expected waiting time until a train arrives. they arrive at a Poisson rate of 2 trains per 30 minutes. (A) (B) (C) (D) (E) 0.18 0. 2. (A) (B) (C) (D) (E) 24 minutes 25 minutes 26 minutes 27 minutes 28 minutes 130 . Starting at 7:00. Payouts are independent. Calculate the probability that there are no payouts of 1.

the benefit premium was calculated using the equivalence principle.000 on (45) that has been in force for 15 years.214. Calculate the actuarial present value of this insurance. When the insured decides to stop paying premiums after 15 years.05. you are given: (i) (ii) (iii) (iv) Mortality follows the Illustrative Life Table. t < 12 t ≥ 12 t <5 t ≥5 (ii) μx (t ) = ⎨ ⎧0.59 0. For a fully discrete 20-year endowment insurance of 10. (A) (B) (C) (D) (E) 8120 8500 8880 9260 9640 215. For a whole life insurance of 1 on (x) with benefits payable at the moment of death.000 but the pure endowment value is reduced such that the expected prospective loss at age 60 is unchanged.61 0.03.68 131 . you are given: (i) δt = ⎨ ⎧0. (A) (B) (C) (D) (E) 0. Calculate the reduced pure endowment value.04.02. i = 0. ⎩0. ⎩0.66 0.64 0. the death benefit remains at 10.06 At issue.

Settlement expenses are 5% of the benefit. For a fully continuous whole life insurance on (x). The initial expense at issue is 50. δ = 0. The gross or contract premium is 100 per year.040 . payable at the moment of death. ( μ x1) ( t ) = 0. t>0 t>0 ( μ x2 ) ( t ) = 0. Maintenance expenses are 3 per year.216. you are given: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) The benefit is 2000 for death by accidental means (decrement 1). payable continuously. payable continuously. (A) (B) (C) (D) (E) – 446 – 223 0 223 446 132 .004 . The benefit is 1000 for death by other means (decrement 2).05 Calculate the actuarial present value at issue of the insurer’s expense-augmented loss random variable for this insurance.

80 0.4 4.05 ⎟ ⎜ 0.217. (A) (B) (C) (D) (E) 2.7 4. receiving Home Health Care benefits State 3 = disabled. Calculate the variance of the number of those 50 members who will be receiving Nursing Home benefits during year 3. receiving Nursing Home benefits The annual transition matrix is given by: ⎛ 0. no benefits State 2 = disabled.05 0.00 ⎟ ⎝ ⎠ Transitions occur at the end of each year. State 1 = healthy. there are 50 members.05 ⎞ ⎜ ⎟ ⎜ 0. all in state 1.90 0. healthy. At the start of year 1.15 0.5 4.00 1.6 133 .00 0.3 2. A homogeneous Markov model has three states representing the status of the members of a population.

1.1⎞ ⎜ ⎟ Qn = ⎜ 0 0 1 ⎟ ⎜ 0 0 1 ⎟ ⎝ ⎠ ⎛ 0 0.218.6 0. A benefit of 4 is paid at the end of any year that the individual is in state 1 at the end of the year.… An individual starts out in state 0 and transitions occur mid-year. (A) (B) (C) (D) (E) – 0.3 0. and 2 Annual transition matrix Qn as follows: ⎛ 0. An insurance is provided whereby: (i) A premium of 1 is paid at the beginning of each year that an individual is in state 0 or 1. i = 0.3 0.7 ⎞ ⎜ ⎟ Qn = ⎜ 0 0 1 ⎟ ⎜0 0 1 ⎟ ⎝ ⎠ for n = 0 and 1. and for n = 2.34 0.1 (ii) (iii) Calculate the actuarial present value of premiums minus the actuarial present value of benefits at the start of this insurance. 3. 4.00 0.50 0. A non-homogenous Markov model has: (i) (ii) Three states: 0.17 0.66 134 .

You are given the following information on participants entering a special 2-year program for treatment of a disease: (i) (ii) (iii) Only 10% survive to the end of the second year. o (A) (B) (C) (D) (E) 18.75 0.219.66 0. Calculate e20:25 for a smoker (20) and a non-smoker (25) with independent future lifetimes.3 20.61 0.5 26.82 220. lx = 500 (110 − x ) . The force of mortality for year 2 is three times the force of mortality for year 1.1 24.4 22. Calculate the probability that a participant who survives to the end of month 3 dies by the end of month 21. non-smokers have a force of mortality equal to one half that of smokers. 0 ≤ x ≤ 110 .71 0. (A) (B) (C) (D) (E) 0. For non-smokers.8 135 . In a population. The force of mortality is constant within each year.

(ii) (iii) (iv) && a30:20 = 15.6602 1000 A1:10 x 16. The benefit premium.1 3.61 (A) (B) (C) (D) (E) 2.7201 8.66 32. determined by the equivalence principle. && ax:10 8.0 3.3 136 . For a special fully discrete 20-year term insurance on (30): (i) The death benefit is 1000 during the first ten years and 2000 during the next ten years.0364 x 30 40 Calculate π . is π for each of the first ten years and 2π for each of the next ten years.221.2 3.9 3.

ω ≥ 72 . ω For the constant force and DeMoivre models. For a fully discrete whole life insurance of 25. (A) (B) (C) (D) (E) ILT < CF < DM ILT < DM < CF CF < DM < ILT DM < CF < ILT DM < ILT < CF 137 .00015V25 . x ≥ 0 DeMoivre model (DM).05332 Calculate 25. where s ( x ) = 1 − x .000 on (25). where s ( x ) = e − μ x .01128 1 P25:15 = 0. 2 p70 is the same as for the Illustrative Life Table. 0 ≤ x ≤ ω . Rank e70:2 for these 3 models.05107 P25:15 = 0. (A) (B) (C) (D) (E) 4420 4460 4500 4540 4580 223. you are given: (i) (ii) (iii) P25 = 0. Constant force model (CF). You are given 3 mortality assumptions: (i) (ii) (iii) Illustrative Life Table (ILT).222.

050 0. μ = 0. (A) (B) (C) (D) (E) 248 254 260 266 272 225.224. and retirement (3). death (1).030 0. The survival function for (40) is based on a constant force of mortality. (A) (B) (C) (D) (E) 10% 13% 16% 19% 25% 138 .010 0. Calculate the probability that (50) dies within 10 years and dies before (40).100 0. disability (2).05 .200 Decrements are uniformly distributed over each year of age in the multiple decrement table. Calculate the expected number of people who will retire before age 62. You are given: (i) The following absolute rates of decrement: x 60 61 (ii) q′( ) x 1 2 q′ ( ) x 3 q′ ( ) x 0. You are given: (i) (ii) (iii) The future lifetimes of (40) and (50) are independent.013 0. The survival function for (50) follows DeMoivre’s law with ω = 110 . A population of 1000 lives age 60 is subject to 3 decrements.

60 0. Oil wells produce until they run dry.02 139 .00 0. (A) (B) (C) (D) (E) 0. t (years) 0 1 2 3 4 5 6 7 S(t) 1.10 (ii) (iii) Calculate the ratio of the actual value of R to the expected value of R. i = 0.00 1. It insures them for 1 million each against failure for two years where the loss is payable at the end of the year of failure.05 0.98 1.30 0. You are given: (i) R is the present-value random variable for the insurer’s aggregate losses on the 10 wells.94 0.10 0.96 0.90 0.80 0.226. The insurer actually experiences 3 failures in the first year and 5 in the second year.00 The survival function for a well is given by: An oil company owns 10 wells age 3.

0.09 0.15 140 . Var L = 1 / 5 (iv) (v) (vi) L′ is the loss at issue random variable using the premium π .12 0. Calculate π .10 0.07 0. For a fully discrete 2-year term insurance of 1 on (x): (i) (ii) (iii) qx = 0.9 is the prospective loss random variable at time 1 using the premium determined by the equivalence principle.227.1 qx +1 = 0.11 0.08 0. (A) (B) (C) (D) (E) 0. L is the loss at issue random variable using the premium based on the equivalence principle. 1L Calculate Var 1 L K ( x ) > 0 . For a fully continuous whole life insurance of 1 on (x): (i) (ii) (iii) Ax = 1/ 3 δ = 010 . Var L′ = 16 / 45 .05 0.13 ( ) 228.05 (A) (B) (C) (D) (E) 0.2 v = 0.

7 19. For a special fully discrete 20-year endowment insurance on (40): (i) The death benefit is 1000 for the first 10 years and 2000 thereafter. The annual benefit premium.0 15.…13 (ii) (iii) (iv) (v) && a51:9 = 7. Mortality follows DeMoivre’s Law with ω = 120 .3 17.05 Calculate the 75th percentile of the distribution of Y.001k + 0.001 . 9.6 14. 490 (A) (B) (C) (D) (E) 500 530 550 560 141 . The pure endowment benefit is 2000. (ii) (iii) δ = 0.229. is 40 for each of the first 10 years and 100 for each year thereafter.1 Calculate the 10th year terminal reserve using the benefit premiums. You are given: (i) Y is the present value random variable for a continuous whole life annuity of 1 per year on (40). determined using the equivalence principle. i = 0.05 k = 8. q40+ k = 0. (A) (B) (C) (D) (E) 12.0 230.

(ii) (iii) (iv) (v) q[80] = 0. based on the equivalence principle.231. with death benefits payable at the end of the year of death. Calculate 2V .95 ( lx ) 800 − − τ ( dx ) 8 8 8 1 ( dx ) 16 16 16 2 The benefit premium. who is subject to a double-decrement model: (i) (ii) The benefit is 2000 for decrement 1 and 1000 for decrement 2. (A) (B) (C) (D) (E) 655 660 665 670 675 232. the benefit reserve at the end of year 2. is 34. For a fully discrete 4-year term insurance on (40).80 1000 A81 = 689. you are given: (i) Mortality follows a select and ultimate mortality table with a one-year select period.06 1000 A80 = 679. For a whole life insurance of 1000 on (80). The following is an extract from the double-decrement table for the last 3 years of this insurance: x 41 42 43 (iii) (iv) v = 0.5 q80 i = 0. 142 .52 Calculate 1000A[80] .

You are given: (i) (ii) (iii) qxx = 0.800 27.01 i = 0.000 if both persons are alive and 2000 if exactly one person is alive.200 143 .(A) (B) (C) (D) (E) 8 9 10 11 12 233. each following the same mortality table.900 28.05 Calculate the actuarial present value of this annuity. You are pricing a special 3-year temporary life annuity-due on two lives each age x.000 28. with independent future lifetimes. The annuity pays 10. (A) (B) (C) (D) (E) 27.100 28.04 qx +1:x +1 = 0.

183 0.125 x (ii) (iii) (iv) (1 Calculate qx ) . For a triple decrement table. you are given: (i) Each decrement is uniformly distributed over each year of age in its associated single decrement table.080 x 3 q′( ) = 0.234.180 0.189 144 .177 0. (A) (B) (C) (D) (E) 0.200 x 2 q′( ) = 0.186 0. 1 q′( ) = 0.

2 145 .8 16. ( w) q40+ k = ⎨ ⎩ 0. i = 0.50 (vii) (viii) k CV40 = 1000k kV40 . (v) (vi) k =0 k >0 Withdrawals occur at the end of the year. G. For a fully discrete whole life insurance of 1000 on (40). 3 2 AS = 24 Calculate the gross premium. The following expenses are payable at the beginning of the year: Percent of Premium All Years 10% k ≤3 Per 1000 Insurance 1.3 16. Mortality follows the Illustrative Life Table. you are given: (i) (ii) (iii) (iv) Death and withdrawal are the only decrements. (A) (B) (C) (D) (E) 15.235.06 The probabilities of withdrawal are: ⎧0.2.7 17.4 15.

26 is the probability of decrement by withdrawal. you are given: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) 4 AS 5 AS = 396.77 5 CV = 572.055 0.050 0.0 is the amount of per policy expenses paid at time 4.50 G = 281.05 is the fraction of the gross premium paid at time 4 for expenses.09 is the probability of decrement by death. (A) (B) (C) (D) (E) 0. ) qx(+ 4 = 0.63 = 694.060 0. 2 Calculate i. For a fully discrete insurance of 1000 on (x). 1 ) qx(+ 4 = 0.065 0. e4 = 7.070 146 .12 c4 = 0.236.

237 – 239.00 3.50 Per Policy 15.000 on (x).05 Premiums are determined using the equivalence principle. 237.522 i = 0.00 0. For a semicontinuous 20-year endowment insurance of 25.4058 1 Ax:20 = 0. Calculate the expense-loaded renewal net premiums including policy fee assuming that perpolicy expenses are matched separately by first-year and renewal policy fees. Ax:20 = 0. (A) 884 (B) (C) (D) (E) 887 899 909 912 147 . (A) (B) (C) (D) (E) 884 899 904 909 924 238. you are given: (i) The following expenses are payable at the beginning of the year: Percent of Premium First Year Renewal (ii) 25% 5% Per 1000 Insurance 2.00 Deaths are uniformly distributed over each year of age. Use the following information for questions 237 – 239.3195 (iii) (iv) (v) (vi) (vii) && ax:20 = 12. Calculate the expense-loaded first-year net premium including policy fee assuming that perpolicy expenses are matched separately by first-year and renewal policy fees.

237 .00 Deaths are uniformly distributed over each year of age. For a semicontinuous 20-year endowment insurance of 25.00 0.4058 1 Ax:20 = 0. 239.522 i = 0. Ax:20 = 0. (Repeated for convenience). you are given: The following expenses are payable at the beginning of the year: Percent of Premium First Year Renewal (ii) (iii) (iv) (v) (vi) (vii) 25% 5% Per 1000 Insurance 2.00 3.239. (i) Use the following information for questions 237 – 239.000 on (x). Calculate the level annual expense-loaded premium.3195 && ax:20 = 12. (A) (B) (C) (D) (E) 884 888 893 909 913 148 .50 Per Policy 15.05 Premiums are determined using the equivalence principle.

2 − 0. Death benefits are payable at the moment of death.91a40:10 − 0. Which of the following is a correct expression for the expense-loaded premium? (A) (B) (C) (D) (E) && && (1000 A40:20 + 10 + 5 a40:9 ) / ( 0.95 a40:10 − 0. The expense-loaded premium is determined using the equivalence principle.2 ) && && (1000 A40:20 + 10 + 5 a40:9 ) / ( 0.96 a40:10 − 0.96 a40:10 − 0.91a40:10 − 0.04 a40:20 ) 149 .05 a40:9 ) && (1000 A40:20 + 10 + 5 a40:19 ) / ( 0.25 − 0.2 ) && && (1000 A40:20 + 10 + 5 a40:19 ) / ( 0.05 a40:9 ) && (1000 A40:20 + 10 + 5 a40:9 ) / ( 0. you are given: (i) The following expenses: First Year Percent of Premium 4% 25% 0 Per Policy 0 0 10 Subsequent Years Percent of Premium 4% 5% 0 Per Policy 0 0 5 Taxes Sales Commission Policy Maintenance (ii) (iii) (iv) Expenses are paid at the beginning of each policy year.25 − 0.240. For a 10-payment 20-year endowment insurance of 1000 on (40).

Calculate the expense-loaded premium using the equivalence principle.241.5 Per Policy Expenses 150 25 Year 1 2+ (ii) (iii) (iv) i = 0.000 on (x). For a fully discrete whole life insurance of 100. you are given: (i) Expenses.04 && ax = 10.8 Per policy expenses are matched by a level policy fee to be paid in each year. paid at the beginning of the year.0 0. (A) (B) (C) (D) (E) 5800 5930 6010 6120 6270 150 . are as follows: Percentage of Premium Expenses 50% 4% Per 1000 Expenses 2.

) qx(+10 = 0.18 w i = 0. Death and withdrawal are the only decrements. (A) (B) (C) (D) (E) 1302 1520 1628 1720 1878 151 . e10 = 70 is the amount of per policy expense paid at time 10. For a fully discrete whole life insurance of 10.02 d ) qx(+10 = 0.05 Calculate 11 AS .04 is the fraction of gross premium paid at time 10 for expenses.242.000 on (x). you are given: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) 10 AS = 1600 G = 200 11 CV = 1700 c10 = 0.

243.87 The expense reserve at the end of year 9 is negative 1. Calculate the expense-loaded premium for this insurance. 1000 P35:10 = 76. For a fully discrete 10-year endowment insurance of 1000 on (35). Annual per policy renewal expenses are 5.11 92.82 152 . (A) (B) (C) (D) (E) 80. Percent of premium renewal expenses are 10% of the expense-loaded premium.27 89.20 83. you are given: (i) (ii) (iii) (iv) (v) (vi) Expenses are paid at the beginning of each year.67. Expense-loaded premiums were calculated using the equivalence principle.54 86.

244.. = 75 ) qx(+3 = 0. k = 1. by how much does 4 AS decrease? (A) (B) (C) (D) (E) 1.93 2.05 4 CV d k = 1. ck = 0.. For a fully discrete whole life insurance of 1000 on (x). you are given: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) G = 30 ek = 5...013 ( ) qx +3 = 0.64 1.22 If withdrawals and all expenses for year 3 are each 120% of the values shown above. i = 0...3.67 1.05 w 3 AS = 25. 2.03 153 .02.3.59 1. 2.

you are given: (i) The following expenses: Year 1 Percent of Per Policy Premium 5% 0 25% 0 0 20 Years 2-10 Percent of Per Policy Premium 5% 0 10% 0 0 10 Taxes Sales commission Policy maintenance (ii) (iii) Expenses are paid at the beginning of each policy year.245.95 a30:5 − 0.15 )( 10 20 A30 )( 10 20 A30 )( ) 154 . The expense-loaded premium is determined using the equivalence principle.85 a30:5 − 0.15 )( ) 10 20 A30 )( ) ) ) (1000 (1000 (1000 10 20 A30 && + 20 + 10 a30:19 / 0. Which of the following is correct expression for the expense-loaded premium? (A) (B) (C) (D) (E) (1000 (1000 10 20 A30 && && + 20 + 10 a30:19 / 0.25 − 0.10 a30:4 && + 20 + 10 a30:19 / 0.10 a30:4 && + 20 + 10 a30:9 / 0. For a fully discrete 5-payment 10-year deferred 20-year term insurance of 1000 on (30).25 − 0.10 a30:4 && && + 20 + 10 a30:9 / 0.25 − 0.95 a30:5 − 0.85 a30:5 − 0.95 a30:5 − 0.

are: b1 = 3000 b2 = 2000 The maturity benefit is 1000. payable at the end of the year of death.246. you are given: (i) Death benefits. Expenses. (a) Commissions are 3% of the expense-loaded premium. (c) i = 0.8 (ii) (iii) (iv) (v) Calculate the expense-loaded premium using the equivalence principle. (b) Other expenses are 15 in the first year and 2 in the second year. For a special single premium 2-year endowment insurance on (x).04 px = 0. (A) (B) (C) (D) (E) 670 940 1000 1300 1370 155 . payable at the beginning of the year: Taxes are 2% of the expense-loaded premium.9 px +1 = 0.

(A) (B) (C) (D) (E) 1597 2296 2303 2343 2575 156 . 3-year term insurance of 10. G is the expense-loaded level annual premium for this insurance.20 0.50 0.10 qx +1 = 0. paid at the end of the year of death. are 20 per policy plus 1 per 1000 of insurance.50 1.10 − Settlement expenses.000 on (x). you are given: (i) (ii) i = 0. are: Policy Year Per policy Per 1000 of insurance Fraction of premium (iii) (iv) 1 2 3 (v) 25 10 10 4. paid at the beginning of the year.20 Death is the only decrement. The single benefit premium for this insurance is 3499.247. (vi) (vii) Calculate G. For a fully discrete 2-payment.15 qx + 2 = 0. Expenses.50 1.05 qx = 0. using the equivalence principle.

The expenses are: Percent of Premium 35% 5% Per Policy 20 5 Per 1000 of Insurance 15.50 First Year Renewal Calculate the actuarial present value of amounts available for profit and contingencies.06 The annual contract premium is 495. Expenses are payable at the beginning of the year. (A) (B) (C) (D) (E) 930 1080 1130 1180 1230 157 . i = 0. you are given: (i) (ii) (iii) (iv) (v) Mortality follows the Illustrative Life Table. For a fully discrete 20-year endowment insurance of 10.248.000 on (50).00 1.

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