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Unformatted text preview: Quiz 6 STAT 479
October 19, 2010 1. Hewitt Health Insurance Company sells a hospital indemnity program that covers adults and
children. For adults, there is a 10% chance of a claim. Claims for adults are distributed as a gamma
distribution with (X = 4 and 6. For children, there is a 5% chance of a claim. Claims for children are distributed as a gamma
distribution with a = 2 and 9. Hewitt has 1000 policies covering adults and 200 policies covering children.
The variance of Hewitt’s portfolio of policies is 75,920,000. Determine 0. VM 3 < $34M” +(%>Z_lng>(/ML>2 :: jg”; or 9 z 4 9 Z r
l/gu ()0: 492": Ling a, lixllcgrgm ’9 E (7‘) " “a . UM; {IOOO>[(0JO§(4®Z> l (aloybﬁoX/roé] k + :1an 2. The Pareto distribution is being discretized using the Method of Moment Matching where the
first moment is being matched. The Pareto distribution has parameters of a = 3 and B = 400. The span used in this process is 250. Calculate the probability assigned 500. “it? ...
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 Spring '10
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