IAI Actuarial Core Principles · Risk Modelling and Survival Analysis · Mortality projection
Under a Lee-Carter model, ln m(x,t) = a(x) + b(x)k(t). Which statement about the parameters is correct?
In Lee-Carter, a(x) is the average age profile of log mortality, k(t) is the time-varying mortality level index, and b(x) measures how strongly each age responds to changes in k(t). Only k(t) is projected forward.
- Aa(x) is the average age-specific log mortality pattern, and b(x) gives how sensitive each age is to changes in k(t)Correct
- Bk(t) is an age effect and a(x) is a calendar-year effect
- Cb(x) is the long-run mean of k(t) over time
- Da(x) must be projected forward in time using an ARIMA model
- b(x) is the same for all ages by construction
Explanation
In Lee-Carter, a(x) captures the average age shape of log mortality, k(t) is the time index of overall mortality level, and b(x) shows how much each age responds to k(t). Only k(t) is projected, typically by a random walk with drift.
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