S479 F09 Quiz 2 - In other words: E[(X-d) + ] = 0.5E[X]...

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Stat 479 Fall 2009 Quiz 2 September 10, 2009 1. Losses from a policy covering emergency room visits are distributed as a Pareto distribution with α = 3 and θ = 1000. The insurance company wants to impose a deductible such that the expected cost per emergency room visit under the policy is reduced to 50%.
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Unformatted text preview: In other words: E[(X-d) + ] = 0.5E[X] Determine d. 2. The random variable X is uniformly distributed between 20 and z. TVaR .80 (X) = 155. Determine k so that the standard deviation principle is also equal to 155....
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This note was uploaded on 03/15/2012 for the course STAT 479 taught by Professor Na during the Spring '10 term at Purdue University-West Lafayette.

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S479 F09 Quiz 2 - In other words: E[(X-d) + ] = 0.5E[X]...

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