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  #1  
Old 10-27-2010, 03:24 PM
silvermission silvermission is offline
 
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Default SOA Sample C #80

How do we find q70 = .03318 from the information given (i = .08)? I assumed that i = .08 meant the probability of dying in a year is 8%, but that is apparently incorrect. Furthermore, I cannot find the Illustrative Life Table in my Exam C/4 tables. Is this table in the exam tables given? I find this problem to be very unfair as it is simple to do if you know how to find some obscure number and impossible if you don't. Anyone else having this problem?
Thanks for your help.

QUESTION

A fund is established by collecting an amount P from each of 100 independent lives age 70.
The fund will pay the following benefits:
10, payable at the end of the year of death, for those who die before age 72, or
P, payable at age 72, to those who survive.
You are given:
(i) Mortality follows the Illustrative Life Table.
(ii) i = 0.08
For this question only, you are also given:
The number of claims in the first year is simulated from the binomial distribution using the
inverse transform method (where smaller random numbers correspond to fewer deaths). The
random number for the first trial, generated using the uniform distribution on [0, 1], is 0.18.
Calculate the simulated claim amount.

SOLUTION
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Old 10-27-2010, 04:10 PM
grogshop grogshop is offline
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Are you sure that you're looking at up-to-date listing of sample questions?

You won't be provided the Illustrative Life Table at Exam C.
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Old 10-27-2010, 04:35 PM
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Bballry1234 Bballry1234 is offline
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Quote:
Originally Posted by silvermission View Post
How do we find q70 = .03318 from the information given (i = .08)? I assumed that i = .08 meant the probability of dying in a year is 8%, but that is apparently incorrect. Furthermore, I cannot find the Illustrative Life Table in my Exam C/4 tables. Is this table in the exam tables given? I find this problem to be very unfair as it is simple to do if you know how to find some obscure number and impossible if you don't. Anyone else having this problem?
Thanks for your help.

QUESTION

A fund is established by collecting an amount P from each of 100 independent lives age 70.
The fund will pay the following benefits:
10, payable at the end of the year of death, for those who die before age 72, or
P, payable at age 72, to those who survive.
You are given:
(i) Mortality follows the Illustrative Life Table.
(ii) i = 0.08
For this question only, you are also given:
The number of claims in the first year is simulated from the binomial distribution using the
inverse transform method (where smaller random numbers correspond to fewer deaths). The
random number for the first trial, generated using the uniform distribution on [0, 1], is 0.18.
Calculate the simulated claim amount.

SOLUTION

If this is what exam C is all about then I think I bought the wrong manual, and I'm in trouble come next week! haha
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Old 10-27-2010, 08:50 PM
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Dedicated111 Dedicated111 is offline
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This is totally a do-able question IMO, but they would HAVE to give you the portion of the illustrative table needed to complete the problem. That's where q70 = .03318 comes from.
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