Let X be a random variable representing the present value of the benefits of a pure endowment contract and y be a random variable representing the present value of the benefits of a term assurance contract which pays the death benefit at the end of the year of death. Both contracts have unit sum assured, a term of n years and were issued to the same life aged x. Derive and simply as far as possible using standard actuarial notation an expression for the covariance of X and Y. 141 Hence or otherwise, derive an expression for the variance of (X+Y) and simplify it as far as possible using standard actuarial notation, Total 81