SOA Exam FAM Sample Question 6.24
Study guide: Exam FAM
For a fully continuous whole life insurance of 1 on (x), you are given:
(i) L is the present value of the loss at issue random variable if the premium rate is determined by the equivalence principle
(ii) L^{*} is the present value of the loss at issue random variable if the premium rate is 0.06
(iii) \delta = 0.07
(iv) \bar{A}_{x} = 0.30
(v) Var(L) = 0.18
Calculate Var(L^{*}).
[Question 8 on the Spring 2015 exam]
- A) 0.18
- B) 0.21
- C) 0.24
- D) 0.27
- E) 0.30
Answer this question and see the worked solution