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 is an equivalent expression to (1 - x/(x+blah))^20?

The key idea is to rewrite the inner part with a common denominator. Write 1 as (x+blah)/(x+blah). Then 1 - x/(x+blah) = (x+blah)/(x+blah) - x/(x+blah) = [ (x+blah) - x ] / (x+blah) = blah/(x+blah). So the whole expression becomes [blah/(x+blah)]^20. That's why the equivalent form is (blah/(x+blah))^20. The other forms change the value: removing the exponent 20 would give just the base, changing the exponent to 8 changes the power, and altering the denominator to x+blah+1 changes the fraction altogether.

The key idea is to rewrite the inner part with a common denominator. Write 1 as (x+blah)/(x+blah). Then

1 - x/(x+blah) = (x+blah)/(x+blah) - x/(x+blah) = [ (x+blah) - x ] / (x+blah) = blah/(x+blah).

So the whole expression becomes [blah/(x+blah)]^20. That's why the equivalent form is (blah/(x+blah))^20. The other forms change the value: removing the exponent 20 would give just the base, changing the exponent to 8 changes the power, and altering the denominator to x+blah+1 changes the fraction altogether.