SOA Exam FAM Sample Question 6.12
Study guide: Exam FAM
For a fully discrete whole life insurance of 1000 on (x), you are given:
(i) The following expenses are incurred at the beginning of each year:
| Year 1 | Years 2+ | |
|---|---|---|
| Percent of premium | 75% | 10% |
| Maintenance expenses | 10 | 2 |
(ii) An additional expense of 20 is paid when the death benefit is paid
(iii) The gross premium is determined using the equivalence principle
(iv) i = 0.06
(v) \ddot{a}_{x} = 12.0
(vi) {}^{2}A_{x} = 0.14
Calculate the variance of the loss at issue random variable.
[Question 18 on the Fall 2013 exam]
- A) 14,600
- B) 33,100
- C) 51,700
- D) 70,300
- E) 88,900
Answer this question and see the worked solution