SOA Exam FAM Sample Question 6.19
Study guide: Exam FAM
For a fully discrete whole life insurance of 1 on (50), you are given:
(i) Expenses of 0.20 at the start of the first year and 0.01 at the start of each renewal year are incurred
(ii) Mortality follows the Standard Ultimate Life Table
(iii) i = 0.05
(iv) Gross premiums are determined using the equivalence principle.
Calculate the variance of L_{0}, the gross loss-at-issue random variable.
[A modified version of Question 7 on the Fall 2014 exam]
- A) 0.023
- B) 0.028
- C) 0.033
- D) 0.038
- E) 0.043
Answer this question and see the worked solution