The net rate of interest yielded by the investment of insurance funds has seldom departed far from 4%. With such a long record of a fairly constant rate of interest we may not unreasonably ask ourselves whether 4% is in any sense a “natural” rate of interest for long-term investments and, if so, what are the factors which control the rate within measurable distance of this figure. Professor Cassel has definitely put the question “why is the rate of interest -04 instead of -004 or -0004?” and he has answered it by indicating that the rate is controlled by the duration of human life.

From the table on page 168, it is possible to derive the following approximate table, where n equals the unexpired term in years and in equals the gross yield to redemption:

Many papers have been submitted to the Institute upon the subject of the mortality experienced by assured lives in various parts of the world, and descriptions have also been given of the way in which life assurance business is transacted in other countries. There are, however, problems which are peculiar to the transaction of life assurance in a country other than that in which the office was established, and which have not as yet been discussed.