-What Are the Spot Rates R(1)in the Up and Down

question 12

Multiple Choice

-What are the spot rates R(1) in the up and down nodes at time 1?

• A) 0.046815,0.032195
• B) 0.044801,0.034208
• C) 0.039505,0.039505
• D) 0.045130,0.038726
• E) 0.031364,0.041928

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Definitions:

Double Indemnity

An optional provision in life insurance policies that provides that the insurer will pay double the amount due to a beneficiary if the insured dies from accidental causes.

Beneficiaries

Individuals or entities entitled to receive benefits or assets under the terms of a will, trust, insurance policy, or other financial instrument.

Auto Accident

An auto accident refers to a collision involving one or more vehicles, often resulting in property damage, injury, or death.

Permanently Disabled

A condition where an individual is unable to engage in any substantial gainful activity due to a physical or mental impairment that can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months.