490C
Quiz
1.
2.
3.
4.
Losses Stat follow a Pareto distribution with = 3 and = 200. A policy covers the
loss except for a franchise deductible of 50. X is the random variable
representing the amount paid by the insurance company per payment. Calculate
the expected value of the X.
Losses in 2007 are uniformly distributed between 0 and 100,000. An insurance
policy pays for all claims in excess of an ordinary deductible of $20,000. For
2008, claims will be subject to uniform inflation of 20%. The Company
implements an upper limit u (without changing deductible) the so that the
expected cost per loss in 2008 is the same as the expected cost per loss in 2007.
Calculate u.
Losses follow an exponential distribution with a standard deviation of 100. An
insurance company applies a policy deductible d which results in a Loss
Elimination Ratio of 0.1813. Calculate d.
Losses are distributed following the single parameter Pareto (this is not the same
as the Pareto distribution in Question 1) with = 4 and = 90. An insurance
policy is issued with a deductible of 100. Calculate the Var(YL).