An insurance company pays 90% of the amount that exceeds a deductible of 200 $, with a maximum payment of 1,800$. The company loads the expectation of this random variable by 20%, and charges this premium to the policyholder. If the losses are exponentially distributed with a mean of 950$, what is the probability that a claim surpasses the premium?
An insurance company pays 90% of the amount that exceeds a deductible of 200 $, with a maximum payment of 1,800$. The company loads the expectation of this random variable by 20%, and charges this premium to the policyholder. If the losses are exponentially distributed with a mean of 950$, what is the probability that a claim surpasses the premium?
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
Related questions
Question
![An insurance company pays 90% of the amount that exceeds a deductible of 200
$, with a maximum payment of 1,800$. The company loads the expectation of
this random variable by 20%, and charges this premium to the policyholder. If
the losses are exponentially distributed with a mean of 950$, what is the
probability that a claim surpasses the premium?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff0ffe2a2-4fb6-435f-86e0-bd935e02d98d%2F79283fac-249a-4d84-bb5e-7ba0a8b82b1f%2Fggw8xr_processed.png&w=3840&q=75)
Transcribed Image Text:An insurance company pays 90% of the amount that exceeds a deductible of 200
$, with a maximum payment of 1,800$. The company loads the expectation of
this random variable by 20%, and charges this premium to the policyholder. If
the losses are exponentially distributed with a mean of 950$, what is the
probability that a claim surpasses the premium?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 13 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![A First Course in Probability (10th Edition)](https://www.bartleby.com/isbn_cover_images/9780134753119/9780134753119_smallCoverImage.gif)
A First Course in Probability (10th Edition)
Probability
ISBN:
9780134753119
Author:
Sheldon Ross
Publisher:
PEARSON
![A First Course in Probability](https://www.bartleby.com/isbn_cover_images/9780321794772/9780321794772_smallCoverImage.gif)
![A First Course in Probability (10th Edition)](https://www.bartleby.com/isbn_cover_images/9780134753119/9780134753119_smallCoverImage.gif)
A First Course in Probability (10th Edition)
Probability
ISBN:
9780134753119
Author:
Sheldon Ross
Publisher:
PEARSON
![A First Course in Probability](https://www.bartleby.com/isbn_cover_images/9780321794772/9780321794772_smallCoverImage.gif)