For a certain health insurance policy, losses are uniformly distributed on the interval [0, b].The policy has a deductible of $180 and the expected value of the non-reimbursed portionof a loss is $144. Calculate b

For a certain health insurance policy, losses are uniformly distributed on the interval [0, b].The policy has a deductible of $180 and the expected value of the non-reimbursed portionof a loss is $144. Calculate b

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter16: Information, Risk, And Insurance

Section: Chapter Questions

Problem 11RQ: What is an actuarially fair insurance policy?

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Question

For a certain health insurance policy, losses are uniformly distributed on the interval [0, b].
The policy has a deductible of $180 and the expected value of the non-reimbursed portion
of a loss is $144. Calculate b

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