1. A manufacturer’s annual losses follow a distribution with density function f(x) = 2.5(0.6)2.5/ x 3.5 , x > 0.6 0, otherwise. The manufacturer purchases an insurance policy to cover its annual losses with an annual deductible of 2. Calculate the mean of the manufacturer’s annual losses paid by the insurance policy. (A) 0 (B) 0.05 (C) 0.07 (D) 0.12 (E) 0.16
The Expected mean annual loss is given by the function
Now observe the values that x might take as per the constriants.
since the standard deductible is 2 so for any value of x there will not be any variation .It will be ocnstant at 2. Hence x =0 for x<2.
Simlilarly since 2 is deducted annual
For x>0
The deductible variable will be x-2
Thus
if We denote X = deductible variable then
X=0, x<=0
X=x-2, x>0
Now the expected annual loss
Or,
Keeping vlaues we have
Or,
Solving it we get
Hence option (C) is correct.
1. A manufacturer’s annual losses follow a distribution with density function f(x) = 2.5(0.6)2.5/ x 3.5...
3. (4 points) A manufacturer's annual losses follow a distribution with density function: 2.5(0.6)2.5 f(x)235x 0 elsewhere To cover its losses, the manufacturer purchases an insurance policy with an annual deductible of 3. Let Y be the insu payment. a) What is the difference between the median and the 99th percentile of Y? What is the mean of the manufacturer's annual losses not paid by the insurance policy?
3. (4 points) A manufacturer's annual losses follow a distribution with density...
An insurance policy has a deductible of 10. Losses follow a probability distribution with density fx (x) = xe* for 3 > 0 and fx (xv) = 0 otherwise. Find the expected payment Possible Answers [A]e-10 [B]2e-10 (0/106-10 (E 100e-10
An insurance policy covers losses X and Y which have joint density function 24y f(x,y) , y>0. (a) Find the expected value of X (b) Find the probability of a payout if the policy pays X + 2Y subject to a deductible of 1 on X and 1 on 2Y. (c) Find the probability of a payout if the policy pays X +2Y subject to a deductible of 2 on the total payment X + 2Y
An insurance policy covers...
An insurance policy covers losses X and Y which have joint density function 24y f(x,y) , y>0. (a) Find the expected value of X (b) Find the probability of a payout if the policy pays X + 2Y subject to a deductible of 1 on X and 1 on 2Y. (c) Find the probability of a payout if the policy pays X +2Y subject to a deductible of 2 on the total payment X + 2Y
parts a, b and c please
3. An insurance policy covers losses X and Y which have joint density function (a) Find the expected value of X. (b) Find the probability of a payout if the policy pays X + 2Y subject to a deductible of 1 on X and 1 on 2Y (c) Find the probability of a payout if the policy pays X +2Y subject to a deductible of 2 on the total payment X +2Y.
3. An...
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