Question
5. A life insurance is for independent (x)&(y). & pays 2000 at T(xy), 1000 at T(xy), 8 = 0.04, x(t) = 0.02, y(t)= =0.03. (a)Calculate
5. A life insurance is for independent (x)&(y). & pays 2000 at T(xy), 1000 at T(xy), 8 = 0.04, x(t) = 0.02, y(t)= =0.03.
(a)Calculate the covariance between the first and the second death times.
(b)Calculate APV of the benefits.
(c)Calculate Var of the PV of benefits.
(d) If (x)&(y) are subject to a common shock, the time of shock follows exponential distribution with mean 50. Calculate the APV of benefits under the shock.
Step by Step Solution
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Step: 1
a To calculate the covariance between the first and second death times we need the individual probabilities of death for x and y as well as their corr...
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Signals and Systems using MATLAB
Authors: Luis Chaparro
2nd edition
123948126, 978-0123948120
