Question
Suppose you are given the following information about the operational risk losses at a bank. Frequency Severity Probability Number Probability Loss 0.58 0 0.69 $1,000
Suppose you are given the following information about the operational risk losses at a bank.
| Frequency | Severity | |||
| Probability | Number | Probability | Loss | |
| 0.58 | 0 |
| 0.69 | $1,000 |
| 0.25 | 1 |
| 0.22 | $10,000 |
| 0.17 | 2 |
| 0.09 | $100,000 |
a. What is the probability of a loss of $2,000?
b. What is the probability of a loss of $11,000?
Round your answer to two decimals.
c. What is the expected loss implied by the two distributions?
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
