Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. For a portfolio of risks, aggregated losses has a compound Poisson distribution, where the expected number of losses is 10, and loss distribution is

image text in transcribed
4. For a portfolio of risks, aggregated losses has a compound Poisson distribution, where the expected number of losses is 10, and loss distribution is exponential distribution with 0 = 100. To lower the insurance cost, the insurer removes one type of risk, which happens with probability 0.1, and imposes a deductible of 20 per loss. i) What is the expected aggregate amount paid by the insurer after this modification? ii) What is the approximate probability that the aggregate loss is larger than 500 after this modification

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Mathematics questions

Question

=+z Are parents free riding on the goodwill of children?

Answered: 1 week ago