Difficulty: Easy

Average Score: 84%

All of the following statements about mortality tables are true EXCEPT

Rationale

The tables track a group of people from the year they were born until they all die.

Mortality tables do not track individuals from birth to death but rather provide statistical data on mortality rates within specific age groups over time. They are based on historical data and probability theory, allowing actuaries to estimate the likelihood of death for various cohorts rather than following individual life paths.

A (the numbers in the tables are based on past experience.) YOUR ANSWER

This statement is true, as mortality tables are constructed using historical death data collected over time. This empirical foundation allows for the calculation of mortality rates that reflect actual experiences of populations.

B (the theory of probability is applied to numbers in the tables.) YOUR ANSWER

This is also correct, as probability theory underpins the calculations used in mortality tables. By applying statistical methods, actuaries can analyze the likelihood of death for certain age groups and populations, making these tables reliable for forecasting.

C (the tables track a group of people from the year they were born until they all die.) CORRECT

This statement is false; mortality tables do not follow individuals throughout their lives. Instead, they summarize the mortality experience of a defined population at different ages, allowing for estimates based on aggregated data rather than tracking individual lifetimes.

D (actuaries use the tables to predict the number of deaths among a given number of people at a given age.) YOUR ANSWER

This statement is true, as actuaries utilize mortality tables to make predictions about the number of deaths within specific age brackets. The data helps in assessing risks and formulating insurance policies based on these predictions.

Conclusion

Mortality tables are essential tools in actuarial science, grounded in historical data and probability. They provide insights into mortality rates for age cohorts rather than tracking individual life spans. The only misleading statement among the choices is that the tables follow individuals from birth to death, which is not the case; they instead represent aggregate statistics that inform predictions about mortality within populations.

Related Questions

View all