CISC 121 Lecture 9: 2 - Chapter 2 - Part A 2018

28 views3 pages
wunch and 39345 others unlocked
CISC 121 Full Course Notes
35
CISC 121 Full Course Notes
Verified Note
35 documents

Document Summary

In this chapter the goal is to calculate the actuarial present value (apv) of the benefits of a life insurance policy. The actuarial present value may also be called the net single premium (nsp) and it is an expected present value. The apv or nsp is calculated by finding the expected value of the present- value random variable z, e[z]. You are probably already familiar with the concepts of present values and expected values. To illustrate, take an example of a person currently 115 years old. Say you are an insurance provider who has agreed to pay them. if they die in the current year or in the following year. Let us also suppose that there is a 1/3 chance that they will die this year, a 2/3 chance that they will die next year and that interest rates are steady at 5%. Payments are made at the end of the year of death.

Get access

Grade+
$40 USD/m
Billed monthly
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers

Related Documents

Related Questions