Suppose that a lifetime is either 1 year or 2 years uniformly. Our company has a 4000
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Question:
Suppose that a lifetime is either 1 year or 2 years uniformly. Our company has a 4000 benefit life insurance with this life. Assume a constant force of interest of 0.01
a) If the life was in fact 1 year, then what is the present value of the benefits?
b) What are the chances that the present value of the benefits is the above?
c) What is the other possible value for the present value of the benefits of this insurance contract?
d) What is the mean of the present value of the benefits of this insurance contract?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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