Question

1. Construct a discrete probability distribution based on the following information. An actuary estimates that the probability that a group of drivers that own $10,000 autos will be involved in a crash that causes a total loss is 5% and a partial loss of $1,000 is 10% 2. Using the information contained in the distribution above, calculate the expected loss and standard deviation of expected loss. 3. Given that the actuary requires a loading to cover expenses and a contribution to capital providers 30%, what premium should the drivers in the group pay?

Answer 1

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