{"id":383,"date":"2015-01-05T18:56:28","date_gmt":"2015-01-06T00:56:28","guid":{"rendered":"http:\/\/frees.pajarel.net\/?page_id=383"},"modified":"2015-02-22T12:21:12","modified_gmt":"2015-02-22T18:21:12","slug":"interest-rate-risks-and-simulation","status":"publish","type":"page","link":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/actuarial-mathematics\/interest-rate-risks-and-simulation\/","title":{"rendered":"Interest Rate Risks and Simulation"},"content":{"rendered":"<p>Interest rates are, with probability one, not constant over the course of life insurance risks. As remarked by Hickman (1985), &#8220;Interest rate variation and resulting risk is a fact of business life.&#8221; Fortunately, previously developed concepts based on the present value of loss variables extend immediately to the case where the interest environment, although non-constant, is known in advance. We can quantify the impact of uncertainty in the interest environment by introducing concepts of diversifiability for a portfolio of risks. Modeling uncertainty in the interest environment requires complex tools &#8211; this module introduces simulation techniques as one such useful tool.<\/p>\n<p><div class=\"alignleft\"><a href=\"https:\/\/users.ssc.wisc.edu\/~ewfrees\/actuarial-mathematics\/multiple-decrement-models\/6-building-mult-decrement-tables-from-associated-single-life-functions\/3-udd-in-the-single-decrement-models\/\" title=\"3. UDD in the Single Decrement Models\">&#9668 Previous page<\/a><\/div><div class=\"alignright\"><a href=\"https:\/\/users.ssc.wisc.edu\/~ewfrees\/actuarial-mathematics\/interest-rate-risks-and-simulation\/1-financial-math-concepts\/\" title=\"1. Financial Math Concepts\">Next page &#9658<\/a><\/div><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Interest rates are, with probability one, not constant over the course of life insurance risks. As remarked by Hickman (1985), &#8220;Interest rate variation and resulting risk is a fact of business life.&#8221; Fortunately, previously developed &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":1707,"menu_order":4,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false},"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/P8cLPd-6b","acf":[],"_links":{"self":[{"href":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/wp-json\/wp\/v2\/pages\/383"}],"collection":[{"href":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/wp-json\/wp\/v2\/comments?post=383"}],"version-history":[{"count":3,"href":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/wp-json\/wp\/v2\/pages\/383\/revisions"}],"predecessor-version":[{"id":1628,"href":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/wp-json\/wp\/v2\/pages\/383\/revisions\/1628"}],"up":[{"embeddable":true,"href":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/wp-json\/wp\/v2\/pages\/1707"}],"wp:attachment":[{"href":"https:\/\/users.ssc.wisc.edu\/~ewfrees\/wp-json\/wp\/v2\/media?parent=383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}