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The amount of a loss has a Pareto distribution with = 2 and = 5000. An insurance policy on this loss has an ordinary deductible
The amount of a loss has a Pareto distribution with = 2 and = 5000. An insurance policy on this loss has an ordinary deductible of 1,000, a policy limit of 10,000, and a coinsurance of 80%. With a uniform inflation of 2%, calculate the expected claim amount per payment on this policy.
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