Find the variance of the present value of the benefits

Assignment Help Basic Statistics

Reference no: EM131001629

You are given that qx = 0.1, qx+1 = 0.2, qy = 0.2, qy+1 = 0.3, and the rate of interest is a constant 25%. Find the variance of the present value of the benefits in each of the following contracts

(a) A payment of 100 is made at the end of the year of the second death, provided this occurs within 2 years.

(b) Three annual payments of 100 are made, the first at time 0, provided that at least one of (x) or (y) are alive.

Reference no: EM131001629

Questions Cloud

What should the level premium : What should the level premium be if the insurer wants the smallest premium such that the probability of a positive loss is less than 25%?

What would be the sound level : A pair of speaker produces a sound level of 100dB at a point. If one speaker is turned off, what would be the sound level? Assume both speaker produces same level of sound.

What is the width of the slit : Parallel light rays with a wavelength of 580 nm fall on a single slit. On a screen 3.00 m away, the distance between the first dark fringes on either side of the central maximum is 4.30 mm . What is the width of the slit?

Describe the voluntariness test of self-incrimination : Describe the voluntariness test of self-incrimination. Identify 5 circumstances that determine custody and What two circumstances must exist before Miranda rights are required to be read by officers

Find the variance of the present value of the benefits : Find the variance of the present value of the benefits in each of the following contracts a payment of 100 is made at the end of the year of the second death, provided this occurs within 2 years.

The market yield for bonds of maturity issued : The market yield for bonds of maturity issued by similar firms in terms of riskiness is 12.25%. How can Brandon sell debt paying only 11.5% in a 12.25% market?

Why do you think companies are using this type of marketing : What is permission marketing and why do you think companies are using this type of marketing? Secondly, do you think that permission marketing is the future? Why or why not?

How many contracts should be sold : Suppose the security loading is 20%. How many contracts should be sold? It is estimated that 100 contracts will be sold. What should the security loading be?

What is the variance of w in the given case : What is the variance of W in this case? Is it less than, greater than or equal to the variance in (a)? Explain why. For what values of c, if any, will the variance be equal to 0? Explain.

User Account

All Pages