Actuarial Science 2427A/B Lecture 5: Chapter 2 - sections 2.1 - 2.3

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Objective: represent the future lifetime of an individual as a random variable (r. v. : notation and de nitions (x) = an individual life currently aged x. = limiting age (age at which there are no survivors) Tx = continuous r. v. for future life time of (x) x + tx = the age at death r. v. for (x) Fx( ) = cumulative distribution function (c. d. f. ) for tx also referred to as the lifetime distribution for (x) Fx(t) = p[tx t] = p[(x) dies before or at age x + t] Sx(t) = 1 fx(t) = p[tx > t] = p[(x) survives at least t years] fx( ) = the probability density function (p. d. f. ) for tx: key formulas. P(tx t) = p(t0 x + t|t0 > x) Sx(t + u) = sx(t)sx+t(u) (1) (2) (3) (4) 1note that lecture note handouts may have to be modi ed in class to properly re ect full notation.

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