Assume the Actuary Estimates the Net Cost of Providing Health

question 32

Multiple Choice

Assume the actuary estimates the net cost of providing health care benefits to a particular employee during his retirement years to have a present value of $60,000. If the benefits relate to an estimated 25 years of service and five of those years have been completed:

• A) The EPBO would be $12,000.
• B) The EPBO would be $8,400.
• C) The APBO would be $8,400.
• D) The APBO would be $12,000.

---

Definitions:

Basic Solver

An optimization algorithm tool used in mathematical programming and operations research to find an optimal solution by varying multiple inputs within given constraints.

Solving Method

A systematic approach or strategy used to find solutions to problems, often involving mathematical or logical operations.

Binding Constraint

A limitation or restriction in a mathematical problem, such as linear programming, that dictates the feasible region and directly influences the optimal solution.

Solver Reports

These are detailed outputs provided by solver tools in optimization and simulation, offering insights into the solution, constraints, and objective function.