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Probability Old Exam P Forum

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Old 11-07-2001, 03:25 PM
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I think I see a problem with this question and I am looking for confirmation. I'm not going to restate it here - it's availible on the SOA and CAS website. As I see it, Ax is equal to one so that would make the value of answer A undefined as (1-Ax) is in the denominator. This could not be the right answer as the expected value of L at t=0 with premiums determined by the equivalence principle is 0. So what's the deal?
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Old 11-07-2001, 03:29 PM
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Macroman Macroman is offline
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Where is it available on the web site...I have not seen it as of yet....oops May 01

<font size=-1>[ This Message was edited by: Macroman on 2001-11-07 15:30 ]</font>
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Old 11-07-2001, 03:40 PM
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Naturally, as soon as I post this I realize my mistake. They are not asking for an expression for the Expected value of L. So the fact that the expresion for answer A is undefined apparently doesn't matter.
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Old 11-07-2001, 03:43 PM
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For this one, it's (b_t)*(A_x) = 1, not A_x = 1...
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Old 11-07-2001, 03:57 PM
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I now realize that I viewed Ax is the expected value of the special insurance.
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Old 11-07-2001, 04:01 PM
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I'll agree with thing (I think). A_x is just a generic symbol for the present value of $1 of continuous whole life ins. It doesn't depend on the particular benefits of a given situation, just on mortality & discount rates.
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Old 11-07-2001, 04:02 PM
phdmom phdmom is offline
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I got sidetracked before I submitted my post. (didn't want to look like I was beating you over the head!)
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