Abstract
Using a pricing axiom from financial economics, a martingale valuation method is presented with the properties of numeraire invariance and no arbitrage. The pricing method is then applied to cash flows in actuarial models like loans, bonds, insurances, annuities, reserves, and surplus processes. Special emphasis is given to portfolios of defaultable bonds, where new modeling results are given. Also, an optimal repayment analysis of a common loan arrangement reveals that the book and market interest rates have to be equal.
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