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Losses follow a Pareto distribution with parameters = 1000 and = 2. 10 losses are expected each year The number of losses and the individual
Losses follow a Pareto distribution with parameters = 1000 and = 2.
10 losses are expected each year
The number of losses and the individual loss amounts are independent.
For each loss that occurs, the insurer's payment is equal to the entire amount of the loss if the loss is greater than 100. The insurer makes no payment if the loss is less than or equal to 100.
Determine the insurer's expected annual payments and Determine the insurer's expected number of annual payment if all loss amounts increased uniformly by 10%.
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