Hi, I have two more questions from Q&A Bank part 5. First is part i) from Q 5.5 regarding transition matrix of no claim discount system. I understand that the transition matrix is 5*5 and I understand how to derive the first two rows and the last row, just I dont know why the 3rd and 4th rows become: (0.3 0 0 0.7 0 ) (0.1 0.2 0 0 0.7) As if there is exactly one claim was made at the end of the year, a p/holder drops back two levels, but the 3rd low above looks like dropping back three levels and the probability is the sum of 0.1 and 0.2. Can anyone explain this? The second is part ii) and iii) from Q 5.11. ii) When calculating K-M estimate, "Durations at 01.01.1998 "are also included, but the period for this mortality investigation period is from 01.01.1998 to 31.12.2003. So why should we include the durations before 01.01.98 of the first two lives? iii) Estimating the force of matality, how exactly to calculate the central exposed to risk from age 67 to 68 for this particular question? I see the duration line, but I dont know how to get 6 from duration =0 to duration =3m? Thank you very very much if someone can help. I have thought about them for long, just no clue at all. Cheers.
