Question: 2. Death for (x) is distributed such that the probability that an individual dies in the next 3 months is always the same regardless of

2.

Death for (x) is distributed such that the probability that an individual dies in the

next 3 months is always the same regardless of their age. The probability that (x) will

survive for 5 years is 35.8486%. What is the APV (the EPV) of the payout of a 2 year

term life insurance policy on (x) if it pays $300,000 at the end of a quarter in which (x)

dies? Use an annual interest rate of 6% compounded monthly (that's not a typo; I am

giving you the monthly rate)

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