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3. An insurance policy provides a benefit of $1 payable immediately on the death of the last survivor of a male life aged 55 exact and a female life aged 50 exact. Assume that the mortality of the male life and the female life follow the constant force of mortality rule with the rates of 0.03 and 0.02, respectively. Also assume the force of interest equal to 4%. Compute the expected present value of the policy as well as the variance of the random present value.

3. An insurance policy provides a benefit of $1 payable immediately on the death of the last survivor of a male life aged 55 exact and a female life aged 50 exact. Assume that the mortality of the male life and the female life follow the constant force of mortality rule with the rates of 0.03 and 0.02, respectively. Also assume the force of interest equal to 4%. Compute the expected present value of the policy as well as the variance of the random present value.

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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3. An insurance policy provides a benefit of $1 payable immediately on the death of the last survivor of a male life aged 55 exact and a female life aged 50 exact. Assume that the mortality of the male life and the female life follow the constant force of mortality rule with the rates of 0.03 and 0.02, respectively. Also assume the force of interest equal to 4%. Compute the expected present value of the policy as well as the variance of the random present value.
Transcribed Image Text:3. An insurance policy provides a benefit of $1 payable immediately on the death of the last survivor of a male life aged 55 exact and a female life aged 50 exact. Assume that the mortality of the male life and the female life follow the constant force of mortality rule with the rates of 0.03 and 0.02, respectively. Also assume the force of interest equal to 4%. Compute the expected present value of the policy as well as the variance of the random present value.
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