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Hi @David Harper CFA FRM, I apologize but I do not understand the "Pr[-1.96 < Z < 1.96] ~= 95%" part. Why is it 1.96? Since, it is 5%, shouldn't it be 1.645 instead? According to me, shouldn't it be a 97.5% case, instead of a 95%? Rushil

Hi @David Harper CFA FRM, Thank you for responding! I yet am bothered by the fact that we don't consider the survival for just the specific year. So for example, why isn't it 0.9802 * 0.9512 for year 1, [1-(0.9802-9608)] * 0.9048 for year 2, ...., [1-(0.9231-9048)] * 0.7788 for year 5. Won't...

Hi @David Harper CFA FRM, thank you for the uploading the excel file though I fail to understand the Expected Payments part completely in the 5 year situation. How I read the question is that the Expected Payments over 5 years is [(PV of prob of survival in year 1 + PV of Prob of Survival over 2...

@David Harper CFA FRM @Nicole Seaman I had a confusion with the study notes associated with this question. I believe equation 7.18 on page 5 of the associated Study notes is wrong. It misses the condition that "X - u <= x". Please correct me if I am wrong. Thank you!