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Question 6 [5 marks] For a certain insured, the distribution of aggregate claims is binomial with parameters m = 12 and q = 0.25. The

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Question 6 [5 marks] For a certain insured, the distribution of aggregate claims is binomial with parameters m = 12 and q = 0.25. The insurer will pay a dividend, D, equal to the excess of 80% of the premium over claims (excess 0.8 x premium - claims), if positive. The premium is 5. Calculate E[D]

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