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10. Aggregate losses on an insurance coverage follow a Parets distribution with α = 2,0 = 800. Premiums for this coverage are 500. The loss ratio R is the proportion of aggregate losses to premiums (that is, R = X/500 where X is the aggreate loss). If the loss ratio is less than 70%, the insurance company pays a dividend of 80% of premiums times the excess of 70% over the loss ratio. Calculate the expected value of the dividend.

10. Aggregate losses on an insurance coverage follow a Parets distribution with α = 2,0 = 800. Premiums for this coverage are 500. The loss ratio R is the proportion of aggregate losses to premiums (that is, R = X/500 where X is the aggreate loss). If the loss ratio is less than 70%, the insurance company pays a dividend of 80% of premiums times the excess of 70% over the loss ratio. Calculate the expected value of the dividend.

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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10. Aggragate dosses on an insurance coverage follow a Pareto distribution with d = 2, 0 = 80o. Premiums for this covarage are 500. The loss ratio R is the proportion of aggægate losses to premiums < that is, R= X/500 wheva X is the aggrate loss). a5 the loss ratio is less han 70% , the inourance Lompany pays a dividend of 80% % przmiums times the excess of 70/ the axpected value of the dividend. over the loos ratio. Calculate
Transcribed Image Text:10. Aggragate dosses on an insurance coverage follow a Pareto distribution with d = 2, 0 = 80o. Premiums for this covarage are 500. The loss ratio R is the proportion of aggægate losses to premiums < that is, R= X/500 wheva X is the aggrate loss). a5 the loss ratio is less han 70% , the inourance Lompany pays a dividend of 80% % przmiums times the excess of 70/ the axpected value of the dividend. over the loos ratio. Calculate
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