Calculate and interpret expected profit and actual profit.

Free SOA Exam ALTAM (Advanced Long-Term Actuarial Mathematics) lesson in Profit Analysis. 38 min read, ~5,723 words.

Profit vector is the per-policy cash flow at year-end, conditional on being in force at the start of year. Profit signature weights by the probability of being in force at the start of year, measured from issue. Expected profit at issue is the NPV of discounted at the risk discount...