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Tutorials - Solutions-19-21

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Dani Sha
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44 views3 pages

Tutorials - Solutions-19-21

Tutorial Questions

Uploaded by

Dani Sha
Copyright
© © All Rights Reserved
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Solution X1.4 (i) Present value random variable ‘The present value random variable is: 100 ifK, =0 PVRV ={2007 ifK [Total 2] 0 ifkK, 22 (ii) Standard deviation The EPV of the benefit is: EPV =100vq, +2000" py grat 100 200 = Figg 0025 + 5 0975 0.030 = 7.56497 Oo and: E (PY?) =(100)" a, +(200y? y De Guat 100) 2007 = (2) x o02s+{ 22) 0.975 0.030 = 1,149.24870 2] So the variance of the present value random variable is: var(PY) = E(pV?)-(EPY) =1,092.01993 and the standard deviation is /f,092,01993 = 33.0457 ty (Total 4] Solution X1.5 (All ative in 20 years The probability that a life aged 50 is still alive in 20 years” time is: Oo So the probability that 5 independent lives aged 50 are all alive in 20 years’ time is: 0.830883° = 0.39600 ia] (Total 2] (i) Value of k We want to find the largest integer X such that: P(Ky 2k) 209 Now: P(Ksp 2K) = peo = lo Setting this equal to 0.9 gives: Isp = 0.9lg0 = 0.9 96,247 = 86,622.3 a) From the Tables, we see that 86,622.3 lies between Jgs(= 87,093) and lgs(= 85,875) . 0) Since we require ,.pso 20.9, we must have & = 15. ii) (Total 3) Solution X1.6 @— Wehave: Asa Aa A gq (4e-v ops Asso) Agqn (4-4 gh Aeno) 1 = 0.75-0.20+0.254 5 =0,55+0.254, 4 So: 1 135 O75 gy = 055 45h = 72 = 0.73833 (i) We now have: Aggy ~ Age = 0.75 ~ 0.73333 = 0.01667 (ii) Also: 1 255 = 19s = Agi Agsio = 55% 025 = 0.18333 Alternatively, you could write: 7 1g 4x = Ae — Al gg = 0.20 - 0.01667 = 0.18333 (21 a [Total 3] (Total 1} [Total 1}

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