How are the unit fund reserves calculated in the unit-linked assurance contract? And please explain the solution for this question as an example: A five-year unit-linked contract, issued to a life aged 52 exact at entry, has the following vector of in-force expected cashflows: (-518, 175, - 70, -161, 1890) Using consistent assumptions, the projected unit fund values at the end of the year for this policy are: (1051, 2416, 4187, 6009, 8377) Use the above information to calculate the total reserves (both unit and non-unit combined) that the insurer would hold for a single policy in force at the end of year 1, according to the following assumptions: Mortality: AM92 Select Interest: 2% pa effective [4]
