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For a block of fully discrete whole life insurance of 1,000 on N lives age 60, you are given: The future lifetimes are independent. A
For a block of fully discrete whole life insurance of 1,000 on N lives age 60, you are given:
The future lifetimes are independent.
A60= 0.29 and 2A60= 0.11
i= 4%
P is the annual premium for each policyholder.
(a) If N= 500, use normal approximation to calculate the annual premium P such that the probability of a positive total loss is 2.5%.
(b) If P= 15, use normal approximation to calculate the minimum number of policies N the insurer must issue so that the probability of a positive total loss is less than or equal to 2.5%.
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