Actuarial Outpost ASM Example 11A
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#1
04-04-2012, 09:59 AM
 troyandabed Member CAS Join Date: Oct 2011 Location: Air Conditioning Repair Annex Studying for MFE Favorite beer: Red Oak Posts: 370
ASM Example 11A

How do you compute the second moment in Example 11A on pg. 218? I thought you just replace delta with 2*delta in the v using the rule of moments, but either I'm making a math mistake over and over or I'm overlooking something. Thanks.
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#2
04-04-2012, 12:11 PM
 Justin.M Guest Posts: n/a

First off, we are working with i, not delta. With constant q, we have convenient formulas for insurances. Namely, A(x)= q/(q+i).

This is analagous to mu/(mu + delta) for a continuous insurance. For continuous, second moments are calculate using twice the force of interest. For discrete, calculate using 2i + i^2.
#3
04-04-2012, 04:15 PM
 troyandabed Member CAS Join Date: Oct 2011 Location: Air Conditioning Repair Annex Studying for MFE Favorite beer: Red Oak Posts: 370

Quote:
 Originally Posted by Justin.M First off, we are working with i, not delta. With constant q, we have convenient formulas for insurances. Namely, A(x)= q/(q+i). This is analagous to mu/(mu + delta) for a continuous insurance. For continuous, second moments are calculate using twice the force of interest. For discrete, calculate using 2i + i^2.
Can you elaborate on this point any more? Why can you just replace i with 2i + i^2?
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Save Garrett

1/P 2/FM 3/MFE 3/MLC 4/C 5 6 7 8 9 OC1 OC2
VEE - Econ Stats Finance
#4
04-04-2012, 04:51 PM
 Justin.M Guest Posts: n/a

For second moments:
i => 2i + i^2
d => 2d - d^2
v => v^2

These are properties that can be proven. For the sake of this exam, you should just memorize them.

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