The Following Represents Two Yield Curves -If the Cumulative Mortality Rate in Year 3 Is 3

The following represents two yield curves.
$\begin{array} { | l r r | } \hline \text { Maturity } & \text { Pure Discount Treasury Yields } & \text { B-rated Carparate Band } \\\hline & & \text { Yields (Pure Discaun Bonds) } \\1 \text { year } & 3 \text { percent } & 6\text { percent }\\2 \text { year } & 6 \text { percent }& 10 \text { percent } \\20 \text { year } & 12 \text { percent }& 17 \text { percent } \\\hline\end{array}$
-If the cumulative mortality rate in year 3 is 3.46 percent for the B-rated loan,what is its yearly mortality rate in year 3?

A) 1.25 percent.
B) 1.21 percent.
C) 1.00 percent.
D) 0.90 percent.

Correct Answer:

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