Death for (x) is distributed such that the probability that an individual dies in the next 3
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Question:
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).
Related Book For
Probability and Statistics for Engineering and the Sciences
ISBN: 978-1305251809
9th edition
Authors: Jay L. Devore
Posted Date: