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CT5 part2 Q&A Question 2.26

M

ML Actuary

Member
Hi,
Anyone could explain to me why the EDS is 1,488 x q58 rather than 1,492 x q58? There are 4 persons received exactly 3 payments (at 56, 57 & 58), so they must survived at age 58. These 4 person then die before 59, which then reduce the group to 1,488. Isn't it not the case?
 
I think you are correct.
Since question wording says that "number of policyholders receiving exactly 4 or more annuity payments = 1,488" Means number of survivors at the end of 4th year is 1488. Number of survivors at the start of 4th policy year 4 + 1488= 1492
Now the solution wording ( 1st line of page 24 ) " There were 1,488 policies in force at the start of the fourth policy year, all then aged 58."
Both these statements contradicts.
 
Yes, i encountered this problem too. i believe this statement is contradictory.

My calculations for the EDS was using 1492.
Is there an erratum issued for this question?
I am using the 2017 Edition, which is Question 2.27 instead of 2.26 in the Part 2 Q&A.
 
Last edited:
Yes, there is a mistake in the course, sorry. Remember you can check for all known errors as they are in the corrections document on the ActEd website. For this question it says:
In the solution to Q2.27 the number of policyholders alive at the start of the fourth policy year is incorrect. It should be 1,492, not 1,488. This gives an expected death strain of 83,775, and a mortality profit of: 83,775 - 35,358 = £48, 416.
Sorry for the confusion folks (and well spotted:)).
 
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