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Quiz 5, Spring 2022

Quiz for practice

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Sona Kumar
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0% found this document useful (0 votes)
17 views4 pages

Quiz 5, Spring 2022

Quiz for practice

Uploaded by

Sona Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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FINN 372 Quiz No.

5 (Spring, 2022)
Variant A

Total marks : 17.5 April 7 , 2022


Time Allowed: 30 mins.

Name ___________________________ Roll No.______________

Section A (True / False)


Encircle T or F (Each question is worth 1.5 marks)
Assume x, n, m are whole numbers and x,n,m & i are all finite and >0. Also, assume “i” to
have the same value in any one question. Furthermore, assume same mortality curve in one
question.
An answer is True if it holds true for all applicable value of x, n, m & i.

Ax < Ax: n∨¿ ¿ (assume positive and increasing mortality


1. T F 1

with age).
If A x: n∨¿ ¿ =0, then KA x: n∨¿ ¿ = Kvn , where K is any
2. T F 1 ❑ ❑

number greater than 0.


(IA )x : n∨¿ ¿ > A x: n∨¿ ¿ (assume positive and increasing mortality)
3. T F 1 ❑ 1 ❑
Section B (Multiple Choice Questions)
Encircle the correct answer.
(Each question is worth 3 marks).
1. If nPx = 0, which of the following statements is correct :

Ax: n∨¿ ¿ = Ax: n∨¿ ¿ (pure endowment)


❑ 1
I.

A x: n∨¿ ¿ >0
1 ❑
II.
1 ❑
III. Ax > A x : n∨¿ ¿

Make same assumptions about x,n & i as in True / False questions.


A. I only
B. II only
C. I & II only
D. II & III only
E. I, II & III

2. You are currently 60 years old and want to buy a term insurance plan. The plan provides
no payments if you die in the first two years and death benefits of 50, 70 and 90 if you
die in years 3,4 and 5 respectively. What is the present value of this plan (correct to 2nd
decimal place – mark the nearest answer).
You are given :
q = 0.235
2 60

1 ❑
(IA )62: 3∨¿ ¿ = 1.1

1 ❑
A62: 3∨¿ ¿ = 0.586

¿ i=0 .06
A. 8.28
B. 9.35
C. 9.91
D. 26.95
E. 30.45
3. You are given the following :
x lx
60 1,000
61 950
62 850
63 700
64 500
65 250

Assume i=10%

Find 2/ A161: 2∨¿ ¿

A. .31
B. .34
C. .37
D. .44
E. .48
Section C (Subjective Portion)
Show your working clearly (worth 4 marks)
❑ ❑
1. You are given (IA )140: 10∨¿ ¿ = 4.8, (IA )141: 9∨¿ ¿ = 4.7, q40 = 0.05 and i= 0.06. Find A140:

(Give your answer to nearest 2nd decimal place).
10∨¿ ¿

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