Examlex

Solved

A Company That Sells Annuities Must Base the Annual Payout

question 155

Short Answer

A company that sells annuities must base the annual payout on the probability distribution of the length of life of the participants in the plan.Suppose the probability distribution of the lifetimes of the participants is approximately a normal distribution with a mean of 68 years and a standard deviation of 3.5 years.What proportion of the plan recipients die before they reach the standard retirement age of 65?


Definitions:

Local Currency

Refers to the legal tender or official currency that is used within a country's borders.

Ending Inventory

The total value of goods available for sale at the end of an accounting period.

Related Questions