Let L be the loss random variable for a fully discrete (i.e., annual premiums and benefit payable at the end of the year of death)

whole life insurance of 1 purchased by a life age 25. Find £[1]

and Var{L) in each of the following cases:

(a) d = .08, A25 — .40, ^A25 = .23, and the annual premium is 7% of the amount of insurance.

(b) / = .08, 4 = 1 10 - X for < jc < 1 10, and the annual premium is determined by the equivalence principle.