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The underlying distribution for 2011 losses is given by f(x) = 1/3 e ^( x/3) , x > 0 where losses are expressed in millions

The underlying distribution for 2011 losses is given by f(x) = 1/3 e ^( x/3) , x > 0

where losses are expressed in millions of euros. Inflation of 4% impacts all claims uniformly from 2011 to 2012. Under a basic limits policy, individual losses are capped at e2.0 million in each year. What is the inflation rate from 2011 to 2012 on the capped losses?

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