Which expression correctly defines the cumulative hazard function H(x) in terms of the hazard rate h(t)?

Study for the SOA Fundamentals of Actuarial Mathematics (FAM) Exam. Prepare with flashcards and multiple choice questions with detailed explanations. Get ready for your future as an actuary!

Multiple Choice

Which expression correctly defines the cumulative hazard function H(x) in terms of the hazard rate h(t)?

Explanation:
Hazard rate h(t) is the instantaneous risk of failure at time t for someone who has survived to t. To accumulate that risk up to time x, you integrate h(t) over time from 0 to x. That sum of instantaneous risks, ∫_0^x h(t) dt, defines the cumulative hazard H(x). A key consequence is the relation to the survival function: S(x) = exp(-H(x)). The other forms don’t fit because S(x) is a survival probability, not a hazard accumulation; a negative integral would have no physical meaning for hazard; and integrating f(t) would give the distribution function F(x), not the cumulative hazard.

Hazard rate h(t) is the instantaneous risk of failure at time t for someone who has survived to t. To accumulate that risk up to time x, you integrate h(t) over time from 0 to x. That sum of instantaneous risks, ∫_0^x h(t) dt, defines the cumulative hazard H(x). A key consequence is the relation to the survival function: S(x) = exp(-H(x)). The other forms don’t fit because S(x) is a survival probability, not a hazard accumulation; a negative integral would have no physical meaning for hazard; and integrating f(t) would give the distribution function F(x), not the cumulative hazard.

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