Actuarial Outpost > SoA Fall 06 8I Questions 2 and 10
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#1
10-21-2008, 10:11 PM
 actuariallife Member Join Date: May 2007 Posts: 68
Fall 06 8I Questions 2 and 10

Question 2 (c) (ii) Determine number of lives required to be 95% confident that the mortality rate is between 0.002 and 0.003.

I feel confused about how the number of lives (n) was calculated. It's calculated based on original p and q. But the value of p and q will change when n changes. Shouldn't q = 5/n instead of 0.0025?

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Question 10 (C) It's trying to calculate the value of Acme Agent, to compare to the price it asks for. Regarding the 5 million dollars Direct Life will invest in Acme Agent annually, shouldn't it be a revenue for Acme Agent instead of expense? The solution says the 5 million is fixed expense for Acme Agent. But in my opinion, it is an expense for Direct Life but not Acme Agent.

Thank you for all the help.
( I feel very frustrated after worked on some previous years' exam questions. I did much worse than I expected. Only 9 days left guys!)