SOA Exam FAM Sample Question 6.11
Study guide: Exam FAM
For fully discrete whole life insurances of 1 issued on lives age 50, the annual net premium, P, was calculated using the following:
(i) q_{50} = 0.0048
(ii) i = 0.04
(iii) A_{51} = 0.39788
A particular life has a first-year mortality rate 10 times the rate used to calculate P. The mortality rates for all other years are the same as the ones used to calculate P.
Calculate the expected present value of the loss at issue random variable for this life, based on the premium P.
[A modified version of Question 16 on the Fall 2013 exam]
- A) 0.025
- B) 0.033
- C) 0.041
- D) 0.049
- E) 0.057
Answer this question and see the worked solution