Basis: Mortality: AM92 ultimate Interest rate: 4% p.a. Expenses: 10% of each premium Surrender value: None Reserves: Ignore when calculating cashflows. (i) The annual premium for this policy is 17,308.94. (Do not show this.) Show the expected policy cashflow accumulated to the end of each policy year per policy in force at the start of each policy year are approximately: [7 minutes.] (ii) Compute the reserves at times 1,2 and 3 so as to zeroise any negative policy cashflow. [12 minutes.] (iii) What effect does putting reserves in place have on the profits? Why is this the case? (No further calculations are required.) (3 minutes.] Basis: Mortality: AM92 ultimate Interest rate: 4% p.a. Expenses: 10% of each premium Surrender value: None Reserves: Ignore when calculating cashflows. (i) The annual premium for this policy is 17,308.94. (Do not show this.) Show the expected policy cashflow accumulated to the end of each policy year per policy in force at the start of each policy year are approximately: [7 minutes.] (ii) Compute the reserves at times 1,2 and 3 so as to zeroise any negative policy cashflow. [12 minutes.] (iii) What effect does putting reserves in place have on the profits? Why is this the case? (No further calculations are required.) (3 minutes.]