Suppose the model distribution X|Λ=λ is inverse exponential
f(x|λ) = λ exp(-λ/x) / x^2
and the prior distirbution for Λ is gamma with parameters α and θ.
(note: this belongs to the case of "exact...
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Suppose the model distribution X|Λ=λ is inverse exponential
f(x|λ) = λ exp(-λ/x) / x^2
and the prior distirbution for Λ is gamma with parameters α and θ.
(note: this belongs to the case of "exact...
https://sites.google.com/site/asdfasdf23135/mlc12.JPG
How can we find Var(Z)? I got completely lost...
Can someone please explain how to solve this problem?
I believe E(Z)=APV=300 * (0.8 *...
If we instead assume both independent lives have "constant forces of mortaility", would we be able to calculate A_xy directly?
So do you think the calculation of the APV for a DISCRETE joint-life status whole life insurance, A_xy, would be impossible to test on the exam?
How would a more reasonable problem requiring the...
1) OK, I see. But in this case for discrete insurance, shouldn't the upper limit of the sum be 29 (since 30|qxy = 0)??
2) Let me summarize your assertion as follows:
If T(x)~uniform,...
Hi and thanks for your reply.
https://sites.google.com/site/asdfasdf23135/mlc11.JPG
1) So should the upper limit of the sum here be 29, 30, 34, or 35? How can we figure this out?? I seem to be...
Consider two independent lives (65) and (70).
You are given:
i=0.05
μ(65+t) = 1/(35-t)
μ(70+t) = 1/(30-t)
(so both lives are DML with ω=100).
Calculate A_65:70. (discrete joint-life status...
I've corrected the typo in the solution, the correct answer should be 2.218<P<3.551, I'm sorry.
And yes, this was exactly where I got confused before.
I think the key thing is to distinguish...
The stock of a company is trading at $103. A 3-month call option with a strike price of $90 is trading at $17. You can BORROW money at interest rate 8% and can LEND money at 2%. The risk-free...
You are given:
(i) u(x) = (i/δ) v q_x + v p_x u(x+1) for x=0,1,2,...
(ii) u(80)=0
(iii) Deaths are uniformly distributed within each year of age.
Express u(40) as an insurance of the appropriate...
But at the bottom we have the APV for an n-year temporary LIFE annuity, so I believe the premium will be paid for AT MOST n years contingent on survival.
In the normal table provided with the SOA exam, we are actually explicitly asked to use the continuity correction when approximating a DISCRETE r.v. with normal distribution. In question 2 above,...
1) For a special fully discrete whole life insurance of 1000 issued on the life of (75), increasing premiums, Q_k, are payable at time k, for k=0,1,2,... You are given:
(i) Q_k=Q_o * (1+i)^k
(ii)...
1) When a question refers to "percentile premiums", it often will be saying things like "find the smallest annual premium P such that the insurer's probability of a positive financial loss is at most...
1) "The company also has the option of a 6.0% one year zero-coupon bond starting at time 1. In order to obtain this bond you would have to pay 3% of it's purchase price at time 0." <-------I don't...
That is the whole question I got yesterday from some internet site.
If a company has two liabilities (25,000 due at time 1 and 20,000 due at time 2), which of the following combination of bonds satisfies the liabilities and costs the least at time 0? What is the...
I am wondering about this too:
Is there any difference in 'I short an asset' and 'I sell a stock short' ???
Under compound interest, why is the accrued coupon not Fr/[(1+j)^(1-t)] ?? (i.e. shouldn't we simply be discounting the amount Fr from time 1 to time t using compound interest?)
Thanks!
Do you happen to know whether this topic is discussed in the other reference textbooks that were on the syllabus?
F=face amount/par value
r=coupon rate per coupon period
j=effective yield rate per coupon period
Market price = Purchase price - Accrued coupon = P_o (1+j)^t - t * Fr
where t=number of days...
Under which section of the ASM manual does it correspond to the Broverman’s text Section 5.3.3? That section talks about the Yield on a fund where deposits and withdrawals are made continuously and...
For the TI-30XS Multiview calculator, is there any way to put commas in between a large number? i.e. 1,000,000 (as opposed to 1000000)?
I know this can be done with the BAII+, but can it be done...
Yes.
y+z = .375
x+z = .25
So x+y+2z=0.625
=>2z=0
=>z=0
So I think the answer is indeed 0.
An insurance company offers one of the following choices to each of their employees:
(i) Take exactly two insurances
(ii) Take no insurance but get a lump sum of money
The probability of having...