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 of the following expresses the recursive relationship for ex using p_x and e_{x+1}?

You’re dealing with the expected number of whole years a person aged x will live beyond age x (the curtate future lifetime). In one-year time steps, the only way to gain a full year is to survive the next year. If you survive from age x to x+1 (with probability p_x), you’ve completed one year and then still expect e_{x+1} more full years beyond age x+1. If you don’t survive the first year (with probability 1 − p_x), you don’t gain any additional full years. Put together, the expected number of future whole years is ex = p_x [1 + e_{x+1}]. This matches option where you multiply the chance of surviving the year by the one-year gain plus the remaining expectation after age x+1. The other forms would incorrectly introduce extra constants or reference later ages (like e_{x+2} or e_{x+3}) that don’t align with the one-year-step recursive decomposition for the curtate lifetime.

You’re dealing with the expected number of whole years a person aged x will live beyond age x (the curtate future lifetime). In one-year time steps, the only way to gain a full year is to survive the next year. If you survive from age x to x+1 (with probability p_x), you’ve completed one year and then still expect e_{x+1} more full years beyond age x+1. If you don’t survive the first year (with probability 1 − p_x), you don’t gain any additional full years.

Put together, the expected number of future whole years is ex = p_x [1 + e_{x+1}]. This matches option where you multiply the chance of surviving the year by the one-year gain plus the remaining expectation after age x+1.

The other forms would incorrectly introduce extra constants or reference later ages (like e_{x+2} or e_{x+3}) that don’t align with the one-year-step recursive decomposition for the curtate lifetime.