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Old 05-05-2012, 01:54 AM
yonsjoo yonsjoo is offline
Join Date: Apr 2012
Posts: 51
Default SOA 300 question # 40

I was wondering if anyone can help me out on SOA practice question #40.
The question is pretty straight forward except the part "first-year mortality rate ten times the rate used to calculate the annual benefit premium".
On the solution, I am not sure why it simply multiplies q40 by 10 where I thought when mortality rate is increased by 10 times, mu40 should be increased 10 times, result in [new p40 = p40^10].
Thank you!!
VEE: Stats Econ Finance
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Old 05-05-2012, 02:01 AM
LargeNumbers LargeNumbers is offline
Join Date: Nov 2011
Posts: 88

Mortality rate means probability of dying. It's not the same as force of mortality.
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