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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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- Spring '10