2) Aggregate claims follow a process involving a Poisson frequency distribution with a mean of 55, and a Gamma individual claim severity distribution with a = 3 and 0 = 4000. Using a normal approximation, estimate the probability that the aggregate losses will exceed 750000. (Hint: find the mean and standard deviation using conditional 750000-mean. mean/variance formulas, then use P(Z > normal distribution table.) and standard SD

A First Course in Probability (10th Edition)
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Author:Sheldon Ross
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Chapter1: Combinatorial Analysis
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2) Aggregate claims follow a process involving a Poisson frequency
distribution with a mean of 55, and a Gamma individual claim severity
distribution with a = 3 and 0 = 4000. Using a normal approximation,
estimate the probability that the aggregate losses will exceed 750000.
(Hint: find the mean and standard deviation using conditional
%3D
mean/variance formulas, then use P(Z >
750000-mean
)and standard
SD
normal distribution table.)
Transcribed Image Text:2) Aggregate claims follow a process involving a Poisson frequency distribution with a mean of 55, and a Gamma individual claim severity distribution with a = 3 and 0 = 4000. Using a normal approximation, estimate the probability that the aggregate losses will exceed 750000. (Hint: find the mean and standard deviation using conditional %3D mean/variance formulas, then use P(Z > 750000-mean )and standard SD normal distribution table.)
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