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IAI Actuarial Core Principles · Risk Modelling and Survival Analysis · Transition intensities dependent on age (exact or census)

In estimating age-dependent transition intensities from a mortality investigation using the exact age method, which statement best describes how the central exposed to risk is obtained?

Central exposed to risk under the exact age method is the sum of the exact time each life is observed while at the relevant age, from the precise date of entry to the precise date of exit, whether by death, withdrawal or end of observation.

  1. AIt is the total time each life is observed while at the age of interest, measured to the exact date of entry and exitCorrect
  2. BIt is the number of lives alive at the start of each calendar year, ignoring exits during the year
  3. CIt is the number of lives alive at the census date multiplied by the length of the investigation
  4. DIt is the number of deaths divided by the estimated mortality rate
  5. It is the number of lives at the start of the age interval, adjusted by half of the deaths

Explanation

The exact method records each life's precise time under observation at each age, so central exposure is the sum of individual times at risk. The other options use year-start counts or circular definitions, none of which give exact time at risk.

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