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Use Table 3.1 to calculate the minimum premium an insurance company should charge for a $5 million three-year term life

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Use Table 3.1 to calculate the minimum premium an insurance company should charge for a $5 million three-year term life insurance contract issued to a man aged 60. Assume that the premium is paid at the beginning of each year and death always takes place halfway through a year. The risk-free interest rate is 6% per annum (with semiannual compounding).

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Risk Management and Financial Institutions

Risk Management and Financial Institutions

ISBN: 978-1118955949

4th edition

Authors: Hull John

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Question Posted: July 30, 2015 03:08:03
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