IAI Actuarial Core Principles · Risk Modelling and Survival Analysis · Mortality projection
In the Lee-Carter model log m(x,t) = a(x) + b(x)k(t) + e(x,t), which parameter describes the overall level of mortality over time, common to all ages?
The parameter k(t) is correct. It is the time-varying mortality index shared by every age, while b(x) scales its effect by age, a(x) gives the average age pattern of log mortality, and e(x,t) is residual error.
- Aa(x)
- Bb(x)
- Ck(t)Correct
- De(x,t)
- The sum of the a(x) over all ages
Explanation
k(t) is the period index that moves mortality up or down over time for all ages. a(x) is the age-specific average of log mortality, and b(x) is the age-specific sensitivity to k(t). e(x,t) is the error term.
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