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in BUS 3024S - Contingencies by (1.7k points)
If an assurance payment is made one month after death (on average) for a certain policy what would the exponent for 'v' be?

A certain memo from an old paper said 5/12 but I don't get why it isn't 7/12 since 6/12 would be the average death and one month after this would be 7/12. 
by (2.9k points)
What a mystery...I would agree with you that it would be 7/12 if we were discounting till the start of the year. Would you mind posting the question and memo here so we can take a look at the wording? Sometimes they hide some sneaky information that means the premise of the discounting (or maybe accumulating till the end of the year and then discounting using a normal assurance/annuity formula) is suggested by the memo. 
by (1.7k points)
Oh it wanted the policy value at the end of a specific year which means that you need to discount it for 5 months remaining in that year. 


1 Answer

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by (1.7k points)
Question Answered.