CONFIDENTIAL CS/JUL 2022/ASC550

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE SURVIVAL MODELS

COURSE CODE ASC550
EXAMINATION JULY 2022
TIME 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of six (6) questions.

2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.

3. Do not bring any material into the examination room unless permission is given by the invigilator.

4. Please check to make sure that this examination pack consists of:

i. the Question Paper

ii. an Answer Booklet - provided by the Faculty

5. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 5 printed pages
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
 CONFIDENTIAL 2 CS/JUL 2022/ASC550

QUESTION 1

a) Suppose that the survival function of heart disease patients treated in the Medicure
hospital is defined as follows:
i
S„(t) = (l Y , 0<t<a)
Calculate the expected curtate future lifetime of a person aged 95 given that nM = —.
(6 marks)
b) You are given that mortality experience follows Gompertz Law with B = 0.00027 and c =
1.1 Find/ 5 0 (10)
(4 marks)

QUESTION 2

Suppose the survival times (in months) of 12 patients who undergo renal transplantation are
recorded as below. Notation of a plus as a superscript on the number indicates censored
observations.

Male patients: 7, 10+, 16, 33+, 55, 61

Female patients: 31, 45, 65, 76+, 80+, 92

a) Explain what is meant by censored observations in survival data. Identify the type of
censoring involved and give TWO (2) reasons why an observation in this investigation
might be censored.
(5 marks)
b) Calculate the Kaplan-Meier survival function S(t) for male and female patients.
(8 marks)
c) Using the Greenwood's formula of Kaplan-Meier, calculate the variance of 5(30) for
male patients and construct its 95% confidence interval.
(3 marks)
d) Plot the survival curves for male and female patients in the same graph. Interpret the
plot.
(3 marks)
e) What are the median survival times for male and female patient?
(2 marks)

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

 CONFIDENTIAL 3 CS/JUL 2022/ASC550

QUESTION 3

In order to study factors affecting reemployment, 400 unemployed persons were monitored
during one year after their retrenchment date. Survival time recorded for each unemployed
person was the number of weeks to reemployment. Those who were not reemployed during
this period were censored at 52 weeks. Cox's proportional hazards regression model was
fitted to the data using the following covariates and the corresponding regression coefficients.

• Age: age (in years since 18th birthday) at the time of retrenchment.
• Fin: value 1 if received financial aid after retrenchment, 0 otherwise.
• Race: value 1 if Malay, 0 otherwise.
• Wrk: value 1 if had full-time work experience more than 10 years, 0 otherwise.
• Mar: value 1 if was married at the time of retrenchment, 0 otherwise.

j Covariates F,
1 Age -0.057
2 Fin -0.379
3 Race 0.314
4 Wrk -0.150
5 Mar -0.434

a) Define the Cox Proportional Hazard model and write down its hazard function based on
the above information.
(3 mark)
b) State the group of persons to which the baseline hazard applies.
(1 mark)
c) Interpret the minus sign of the estimated coefficient, p}
(4 mark)
d) Using the fitted Cox regression model, calculate and comment on the hazard ratio for
the following:
• A Malay unemployed person who got retrenched at the age of 40, married with five
years of work experience and received some financial aid after retrenchment, and
a Chinese unemployed person who got retrenched at the age of 52, single with
fifteen years of work experience and did not receive any financial aid.

• A Malay unemployed person who got retrenched at the age of 32, single with ten
years of work experience and received no financial aid, and a Malay unemployed
person aged 32 upon retrenchment who is married with thirty-five years of work
experience and received some financial aid.
(8 marks)

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

 CONFIDENTIAL 4 CS/JUL 2022/ASC550

QUESTION 4

a) An actuary has conducted investigations into the mortality rates of its life insurance
policyholders. The crude mortality rates will be used in premium calculation in the future,
i) Suggest a suitable method of graduation for the above scenario and give reasons.
(5 marks)
ii) Discuss on any further considerations that an actuary should take before using the
graduated rates in it premium calculation.
(4 marks)
b) Discuss the importance of smoothness and adherence to data in graduation.
(3 marks)
c) List the THREE (3) assumptions of the simple two-state model.
(2 marks)

QUESTION 5

a) The population at the beginning of each from year 2017 to 2020 are as in table below:

Date Number of population

st
1 January 2017 65,000
1 st January 2018 50,000
1 st January 2019 75,000
1 s t January 2020 90,000

Estimate the central exposed to risk (all ages) for the following interval and sketch the
trapezium. In each case, state any assumption you have made,
i) Period: 1/7/2017 to 30/6/2018
(4 marks)
ii) Period: 1/4/2019 to 30/6/2020
(4 marks)

b) A study was conducted into a mortality of persons aged between exact ages 30 and 31
years. The study took place from 1st January 2018 to 31 December 2018. The following
table shows information on 5 lives observed in the study.

Name Date of Birth Date of death

Fathiah 1/7/1987
Khairul 1/10/1987 1/7/2018
Sarah 1/1/1988
Aina 1/4/1988
Rosli 1/7/1988 1/10/2018

Calculate the q^ntral ^Initial

930
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
 CONFIDENTIAL 5 CS/JUL 2022/ASC550

(6 marks)

QUESTION 6

The table below shows a graduation of the male mortality experience for ages 60 to 68.

Age, x Graduated Observed Exposed to risk

mortality rate deaths
60 0.00037 2 14800
61 0.00043 8 15200
62 0.00048 5 12000
63 0.00053 14 15000
64 0.00059 15 16500
65 0.00066 10 10100
66 0.00074 15 12800
67 0.00083 10 12700
68 0.00093 9 11500

a) Perform the smoothness test for the graduation and comment on your result.
(3 marks)
b) State the test statistics and its distribution under the null hypothesis.
(1 marks)
c) Carry out a chi-squared test for the graduation and state the conclusion.
(7 marks)
d) Carry out TWO (2) tests below to check the suitability of this graduation. For each test,
comment on your results.
i) Cumulative deviation test
(3 marks)
ii) Serial correlation test
(11 marks)

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL