Z denotes the random present value for an insurance contract issued on the independent lives (x), x > 0 and (y), y > 0, where Z = { if T(y) > T(x) otherwise. Given that • (x) is subject to a constant force of mortality of 0.07; • (y) is subject to a constant force of mortality of 0.09; • The force of interest is a constant 8 = 0.06. Compute the variance Var(Z).

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Z denotes the random present value for an insurance contract issued on the independent
lives (x), x > 0 and (y), y > 0, where
vT (1), if T(y) >T(x)
Z =
0,
{
otherwise.
Given that
(x) is subject to a constant force of mortality of 0.07;
• (y) is subject to a constant force of mortality of 0.09%;
• The force of interest is a constant d
0.06.
Compute the variance Var(Z).
Transcribed Image Text:Z denotes the random present value for an insurance contract issued on the independent lives (x), x > 0 and (y), y > 0, where vT (1), if T(y) >T(x) Z = 0, { otherwise. Given that (x) is subject to a constant force of mortality of 0.07; • (y) is subject to a constant force of mortality of 0.09%; • The force of interest is a constant d 0.06. Compute the variance Var(Z).
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