Solve the problems of Examples 2.4-1,3 (that is, find the quantities A, a, and ) for the
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Solve the problems of Examples 2.4-1,3 (that is, find the quantities A, a, and π) for the case when the remaining lifetime T is exponential with parameter μ (we are using the symbol a for other purposes). For simplicity and to make formulas nicer, suppose, that the premium payment is provided continuously with a rate of π. That is, That is, Y = ∫T0 e−δt dt = 1/δ (1−e−δT), and a = E{Y} = 1/δ(1−MT (−δ)).
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