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CT5 question bank part 4.16

O

OmoT

Member
Please can someone explain why in calculating the profit signature, the discount rate was not applied to the profit vector.

(19) = (17) x (18)

Thank you.


upload_2017-8-29_7-15-18.png
 
Hello,

The question says "(i) Calculate the profit signature for this policy according to the premium basis."
 
OmoT said:
Hello,

The question says "(i) Calculate the profit signature for this policy according to the premium basis."
Click to expand...

Discount rate is applied to find EPV.
Profit signature = profit @ year end * prob. of life surviving since inception.
Given solution is correct.
 
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