A business owner is facing a risk whose economic loss is modeled by the random variable . The following is the density function of .
The business owner purchases an insurance policy to cover this potential loss. The insurance policy pays the business owner 80% of the amount of each loss.
Given that a loss has occurred, what is the probability that the amount of the insurance payment to the business owner is less than 2?
An individual purchases an insurance policy to cover a loss whose density function is:
The insurance policy reimburses the policy owner 50% of each loss. Given that a loss has occurred, what is the median amount of the insurance payment made to the policy owner?
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