SOA Exam FAM Sample Question 6.33
Study guide: Exam FAM
An insurance company sells 15-year pure endowments of 10,000 to 500 lives, each age x, with independent future lifetimes. The single premium for each pure endowment is determined by the equivalence principle.
(i) You are given: (as printed)
(ii) i = 0.03
(iii) \mu_{x}(t) = 0.02t, \quad t \ge 0
(iv) _{0}L is the aggregate loss at issue random variable for these pure endowments.
Using the normal approximation without continuity correction, calculate \Pr\left({}_{0}L > 50{,}000\right).
[Question 12 on the Fall 2013 exam]
- A) 0.08
- B) 0.13
- C) 0.18
- D) 0.23
- E) 0.28
Answer this question and see the worked solution