I used the same approach... the formula was horrific though, took 1/2 a page just to write it all out.
Hi guys. I would probably say that the marriages/surrenders/divorce question is definitely as hard as it comes. I thought it slightly unfair that it took about 15 minutes to work out the dependent rates for each of the states. Regarding approach I do remember making an assumption that the transition was made on average half way through a year (the payments could have been paid immediately). So for example, I THINK I remember writing for the premium, EPV = P + P(ap_x)v^0.5 + P(2ap_x)v^1.5 (with hindsight I should have divided the PREMIUMS by v and v^2 because premiums are ALWAYS paid at the start of the year... Oh well, I guess it was the exam pressure For the maturity as (AMOUNT)(3ap_x)v^3 In order to receive the maturity payout, the life would have needed to survive the FULL three years (no assumption regarding when the amount was paid was necessary) The death and surrender were a lot more complicated. I THINK I recall them saying that for surrenders you received a return of premiums so I THINK I wrote: P((aq_x)^s)v^0.5 + 2P((ap_x)(aq_x+1)^s)v^1.5 + 3P((2ap_x)(aq_x+2)^s)v^2.5 where P = premium. The ap and aq terms were then taken from the dependent rates derived earlier. This was just MY approach and I'm sure there is more than one reasonable way of doing it. It would be unfair if marks weren't awarded for methods that could be used. I didn't have time to complete the question (ran out of time) so I didn't obtain the premium. I would be interested to see other people's methods
ct5 april 09 exam yeah, that penultimate question (marriage/surrender/divorce) really ate up my time - getting from independent to dependent rates took me ages and the whole of that question was only worth about 12 marks I think. I really should have skipped that so I had time to finish the last question. I bet they only give you about 3 marks for those dependent rates. Definitely not do-able in 3 hours - I skipped a couple of tricky questions earlier on (a 5 marker and and the 8 mark contingent assurance type question) and then still only got about half way through the last question (16 marks i think), which was actually quite do-able Gutted that I missed out on 6-7 marks becuase I didn't have time to calc the profit signiture and then the profit margin at the end - they were easy marks. Overall I the questions were tough (did you expect anything else?!), but not too tough - the problem was just getting through it all. Am pretty sure I'll be back in October to re-take this - there's no way I got more than about 50%, and I assume the pass mark is usually 50-60 or so - anyone know about that?
