SOA Exam FAM Sample Question 7.23
Study guide: Exam FAM
For a 40-year endowment insurance of 10,000 issued to (25), you are given:
(i) i = 0.04
(ii) p_{25} = 0.995
(iii) \ddot{a}_{25:\overline{20}|} = 11.087
(iv) \ddot{a}_{25:\overline{40}|} = 16.645
(v) The annual level net premium is 216
(vi) A modified net premium reserving method is used for this policy, where the valuation premiums are:
- A first year premium equal to the first year net cost of insurance,
- Level premiums of
\betafor years 2 through 20, and - Level premiums of 216 thereafter.
Calculate \beta.
[Question 15 on the Spring 2016 exam]
- A) 140
- B) 170
- C) 200
- D) 230
- E) 260
Answer this question and see the worked solution