a double dot xy bar = 1 + p xy bar (V) + lower 2 p xy bar (V^2), where
v is the discount factor 1/1.1.
you get: = 1 + (.75+.5-.375)V + [(.75)(.25) + (.5)(.5) -
(.75)(.25)(.5)(.5)]V^2 = 2.11828
Good Luck!
Eric
Does anybody know how to do question number 22 in the Spring 1998 4A
exam?
The question is:
The curtate future lifetimes of a beneficiary, aged x, and her spouse,
aged y, are subject to the following independent probabilities of death:
k q x+k q y+k
0 0.25 0.50
1 0.75 0.50
2 1.00 1.00
You may assume i = 10%
Determine "a double dot xy bar", the net single premium for an annuity
of
1 payable at the beginning of the year as long as either the beneficiary
or spouse is alive.
They say the answer is D. At least 2.0, but less than 2.2
But I keep getting 2.31.
Help!
Thanks,
J.D.