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3. If the 400 policyholders in problem 2 elect a $1,000 deductible, the insurer's dollar loss distribution (X) becomes: X Probability $ 0 .7
3. If the 400 policyholders in problem 2 elect a $1,000 deductible, the insurer's dollar loss distribution (X) becomes: X Probability $ 0 .7 4,000 .2 24,000 .1 1.0 a. b. C. Explain how this new distribution was derived. With Z 1.645, calculate the total gross premium and gross premium per policy. Explain why the premium is lower when a deductible is used.
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Cryptocurrency QuickStart Guide
Authors: Jonathan Reichental
1st Edition
1636100406, 978-1636100401
