(Papers) ACET Paper May 2010 "CT4 – Models"

Q 1) Briefly explain what is meant by strictly stationaity and weak stationarity for a stochastic process. [3]

Q 2) In continuous mortality investigation, usually the mortality data is recorded on policy count basis.

a) State three main problems in calculating mortality rates using such recorded data. (2)
b) The following results were obtained in a mortality investigation:

a) Calculate the probability that a sick life goes to terminally sick state when it leaves the sick state (1)
b) Calculate the expected holding time in the sick state. (1)
c) Calculate the expected future lifetime for:

(i) A Sick life
(ii) A Healthy life