I managed a but can't do b or c.

Login

+1 vote

Best answer

Here are some hints:

--------------------------

(b) and (c) can both be done as follows. Let \(t\) denote the time at which payment of a benefit commences. (And the integral w.r.t. \(t\) will be from \(0\) to \(\infty\).)

Then value, as at time \(t\), the benefit that commences then. This value will be an integral w.r.t. another variable, \(s\). The integrand you need is the same in the two cases, and involves an occupancy probability. For (b) the integral will be from \(1\) to \(6\), for (c) from \(0\) to \(\infty\).

So the result is a double integral in both cases.

There may well be other routes in both cases, but this seems simplest.

--------------------------

Let me know if you need more help, but try to get it on your own!

- All categories
- BUS 1003H - Introduction to Financial Risk (43)
- BUS 2016H - Financial Mathematics (53)
- BUS 3018F - Models (69)
- BUS 3024S - Contingencies (61)
- BUS 4028F - Financial Economics (20)
- BUS 4027W - Actuarial Risk Management (46)
- BUS 4029H - Research Project (5)
- Mphil (1)
- Calculus and Pure Mathematics (3)
- Statistics (16)

...