CFAI Curriculum Volume 2; Page 156; Line 3: …so the life expectancy of a personat age 10 is less than that of a perso who has reached age 60… Is that meant to be the other way round?
Nope. Once you reach age 60, your life expectancy increases conditional upon the information that you have dodged bullets, not been hit by a train, and not contracted ebola. Look at it like this…given you are 10 years old, what is probability of living to 80? Don’t know the exact answer, but I do know that a good bit of uncertainty is there. Now, given you are 60, what is the probability that you manage to hang on for another 20? Again, not sure, but my guess is that it is higher than the 10 year old’s, and less uncertainty exists due to the 50 years that have passed where a maze of potential killers lurk, and the 10 year old has yet to navigate that maze.
It is correct. Seems counterintuitive. If I am 10 then I might be expected to live to 80, but there will be some people that will die really young. If I am 60 then I might be expected to live to 84 because the people that died really young are already out of the population. Edit: got beat to it.
Nice analysis wyantjs! Thanks.
CFAI also has some errata on their site: http://www.cfainstitute.org/cfaprog/resources/cfa_program_errata.html