Q3: Need all parts

The above profit test assumptions were actually selected to price the policies issued to a group of 1000 independent lives aged 50 . You are given the actual experience in the 11th year: - There are 920 lives in force at the beginning of the year. - There are 4 deaths. - Interest earned equals 8%. - Expenses are 4\% of gross premium and 1000 to process each death claim. Every year, you calculate the gain due to each source in the order of interest, expense, and mortality (a) State the difference between the reserve and the pricing assumptions. [3 marks] (b) Calculate the following: i. Net annual premium. ii. Net premium reserve at the end of the 10th year. iii. Net premium reserve at the end of the 11th year. [6 marks] (c) Calculate Pr11, the expected profit in year 11 . [4 marks] (d) Calculate total gain from these 920 policies in year 11 . [3 marks] (e) Calculate the gain due to each source from these 920 policies in year 11 . [9 marks] [Total 25 marks] The above profit test assumptions were actually selected to price the policies issued to a group of 1000 independent lives aged 50 . You are given the actual experience in the 11th year: - There are 920 lives in force at the beginning of the year. - There are 4 deaths. - Interest earned equals 8%. - Expenses are 4\% of gross premium and 1000 to process each death claim. Every year, you calculate the gain due to each source in the order of interest, expense, and mortality (a) State the difference between the reserve and the pricing assumptions. [3 marks] (b) Calculate the following: i. Net annual premium. ii. Net premium reserve at the end of the 10th year. iii. Net premium reserve at the end of the 11th year. [6 marks] (c) Calculate Pr11, the expected profit in year 11 . [4 marks] (d) Calculate total gain from these 920 policies in year 11 . [3 marks] (e) Calculate the gain due to each source from these 920 policies in year 11 . [9 marks] [Total 25 marks]