S479 F10 Quiz 4 Solutions

S479 F10 Quiz 4 Solutions - Quiz 4 STAT 479 1 Losses prior...

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Unformatted text preview: Quiz 4 STAT 479 September 28, 2010 1. Losses prior to any deductible for a health insurance policy are distributed as a Pareto distribution with (9 = 1000 and a = 5. Losses are subject to a franchise deductible of d. The expected value per payment after the deductible is 820. Calculate d. 2. Losses follow an exponential distribution with a mean of 1000. The insurance company wants to implement an ordinary deductible that will result in a loss elimination ratio of 0.5. Calculate the ordinary deductible to be implemented. M ism/DOC? kgkg,w§ 4% e; . ...
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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.

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S479 F10 Quiz 4 Solutions - Quiz 4 STAT 479 1 Losses prior...

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