CT1 IFoA April 2005 Question 1

Discussion in 'CT1' started by v.prasad, Jun 14, 2016.

  1. v.prasad

    v.prasad Member

    Please tell me why e power delta is used instead of using 1+i in the solution, since we are given risk free rate of interest and not force of interest.

    Thanks!!!
     
  2. KaustavSen

    KaustavSen Member

    Hello v.prasad
    Note that the question gives the continuously compounded rate of interest and not just the rate of interest. The continuously compounded rate of interest is the same as the force of interest.

    Kaustav.
     
    John Lee and v.prasad like this.

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