3. An insurance policy provides a benefit of $1 payable immediately on the death of the last survivor of a male life aged 55 exact and a female life aged 50 exact. Assume that the mortality of the...

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Extracted text: 3. An insurance policy provides a benefit of $1 payable immediately on the death of the last survivor of a male life aged 55 exact and a female life aged 50 exact. Assume that the mortality of the male life and the female life follow the constant force of mortality rule with the rates of 0.03 and 0.02, respectively. Also assume the force of interest equal to 4%. Compute the expected present value of the policy as well as the variance of the random present value.