Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

probelm on pics Let N represent the number of accidents arising from a portfolio of risks. Some of these accidents result in claims. Let Mk

probelm on pics

image text in transcribed
Let N represent the number of accidents arising from a portfolio of risks. Some of these accidents result in claims. Let Mk repreSent the number of claims for the km accident. The total number of claims is therefore: 5' = M1 + M2 + + MN, where N = 0 implies that S = 0. Suppose that we have two portfolios where the number of accidents in each portfolio follows a Poisson distribution with parameters A1 = 15 and A2 = 35 respectively. For portfolio 1, the number of claims arising from each accident has the following distribution: Par-(1 claim) = 0.201 Pr(2 claims) = 0.65, Pr(3 claims) = 0.15 For portfolio 2, the number of claims arising from each accident has the following distribution: Pr(2 claims} = 0.10, Pr(3 claims] = {1.75, PT(4 claims) = 0.15 (a) Find the distribution of S = 31 + 3;; assuming the risks are independent. (3 marks) (b) Find 151(3), Var(.5') and the MGF of S

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

Recommended Textbook for

Elementary Algebra Graphs & Authentic Applications (Subscription)

Authors: Jay Lehmann

3rd Edition

0134781252, 9780134781259

More Books

Students also viewed these Mathematics questions