An insurance agent receives a bonus if the loss ratio L on his business is less than 0.5, where L is the total losses (say, X) divided by the total premiums (say, T). The bonus equals (0.5 - L) * (T/30) if L < 0.5 and equals zero otherwise. If X (in $100,000) has the p.d.f. f(x) = 3/x^4, x > 1 and if T (in $100,000) equals 3, determine the expected value of the bonus.
An insurance agent receives a bonus if the loss ratio L on his business is less than 0.5, where L is the total losses (say, X) divided by the total premiums (say, T). The bonus equals (0.5 - L) * (T/30) if L < 0.5 and equals zero otherwise. If X (in $100,000) has the p.d.f. f(x) = 3/x^4, x > 1 and if T (in $100,000) equals 3, determine the expected value of the bonus.
An insurance agent receives a bonus if the loss ratio L on his business is less than 0.5, where L is the total losses (say, X) divided by the total premiums (say, T). The bonus equals (0.5 - L) * (T/30) if L < 0.5 and equals zero otherwise. If X (in $100,000) has the p.d.f. f(x) = 3/x^4, x > 1 and if T (in $100,000) equals 3, determine the expected value of the bonus.
An insurance agent receives a bonus if the loss ratio L on his business is less than 0.5, where L is the total losses (say, X) divided by the total premiums (say, T). The bonus equals (0.5 - L) * (T/30) if L < 0.5 and equals zero otherwise. If X (in $100,000) has the p.d.f.
f(x) = 3/x^4, x > 1
and if T (in $100,000) equals 3, determine the expected value of the bonus.
Definition Definition Probability of occurrence of a continuous random variable within a specified range. When the value of a random variable, Y, is evaluated at a point Y=y, then the probability distribution function gives the probability that Y will take a value less than or equal to y. The probability distribution function formula for random Variable Y following the normal distribution is: F(y) = P (Y ≤ y) The value of probability distribution function for random variable lies between 0 and 1.
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