Exam P Practice Problem 104 – two random insurance losses
Problem 104A
Two random losses and are jointly modeled by the following density function:
Suppose that both of these losses had occurred. Given that is exactly 2, what is the probability that is less than 1?
Problem 104B
Two random losses and are jointly modeled by the following density function:
Suppose that both of these losses had occurred. Determine the probability that exceeds 2 given that the loss is known to be 2.
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Exam P Practice Problem 103 – randomly selected auto collision claims
Problem 103A
The size of an auto collision claim follows a distribution that has density function where .
Two randomly selected claims are examined. Compute the probability that one claim is at least twice as large as the other.
Problem 103B
Auto collision claims follow an exponential distribution with mean 2.
For two randomly selected auto collision claims, compute the probability that the larger claim is more than four times the size of the smaller claims.
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Exam P Practice Problem 102 – estimating claim costs
Problem 102A
Insurance claims modeled by a distribution with the following cumulative distribution function.
The insurance company is performing a study on all claims that exceed 3. Determine the mean of all claims being studied.
Problem 102B
Insurance claims modeled by a distribution with the following cumulative distribution function.
The insurance company is performing a study on all claims that exceed 4. Determine the mean of all claims being studied.
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Exam P Practice Problem 101 – auto collision claims
Problem 101A
The amount paid on an auto collision claim by an insurance company follows a distribution with the following density function.
The insurance company paid 64 claims in a certain month. Determine the approximate probability that the average amount paid is between 7.36 and 8.84.
Problem 101B
The amount paid on an auto collision claim by an insurance company follows a distribution with the following density function.
The insurance company paid 36 claims in a certain month. Determine the approximate 25th percentile for the average claims paid in that month.
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Daniel Ma actuarial
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Exam P Practice Problem 99 – When Random Loss is Doubled
Problem 99A
A business owner faces a risk whose economic loss amount follows a uniform distribution over the interval . In the next year, the loss amount is expected to be doubled and is expected to be modeled by the random variable .
Suppose that the business owner purchases an insurance policy effective at the beginning of next year with the provision that any loss amount less than or equal to 0.5 is the responsibility of the business owner and any loss amount that is greater than 0.5 is paid by the insurer in full. When a loss occurs next year, determine the expected payment made by the insurer to the business owner.
Problem 99B
A business owner faces a risk whose economic loss amount has the following density function:
In the next year, the loss amount is expected to be doubled and is expected to be modeled by the random variable .
Suppose that the business owner purchases an insurance policy effective at the beginning of next year with the provision that any loss amount less than or equal to 1 is the responsibility of the business owner and any loss amount that is greater than 1 is paid by the insurer in full. When a loss occurs next year, what is the expected payment made by the insurer to the business owner?
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expected insurance payment
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Exam P Practice Problem 98 – flipping coins
Problem 98A
Coin 1 is an unbiased coin, i.e. when flipping the coin, the probability of getting a head is 0.5. Coin 2 is a biased coin such that when flipping the coin, the probability of getting a head is 0.6. One of the coins is chosen at random. Then the chosen coin is tossed repeatedly until a head is obtained.
Suppose that the first head is observed in the fifth toss. Determine the probability that the chosen coin is Coin 2.
Problem 98B
Box 1 contains 3 red balls and 1 white ball while Box 2 contains 2 red balls and 2 white balls. The two boxes are identical in appearance. One of the boxes is chosen at random. A ball is sampled from the chosen box with replacement until a white ball is obtained.
Determine the probability that the chosen box is Box 1 if the first white ball is observed on the 6th draw.
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Exam P Practice Problem 97 – Variance of Claim Sizes
Problem 97A
For a type of insurance policies, the following is the probability that the size of claim is greater than .
Calculate the variance of the claim size for this type of insurance policies.
Problem 97B
For a type of insurance policies, the following is the probability that the size of a claim is greater than .
Calculate the expected claim size for this type of insurance policies.
probability exam P
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Exam P Practice Problem 96 – Expected Insurance Payment
Problem 96A
An insurance policy is purchased to cover a random loss subject to a deductible of 1. The cumulative distribution function of the loss amount is:
Given a random loss , determine the expected payment made under this insurance policy?
Problem 96B
An insurance policy is purchased to cover a random loss subject to a deductible of 2. The density function of the loss amount is:
Given a random loss , what is the expected benefit paid by this insurance policy?
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Exam P Practice Problem 95 – Measuring Dispersion
Problem 95A
The lifetime (in years) of a machine for a manufacturing plant is modeled by the random variable . The following is the density function of .
Calculate the standard deviation of the lifetime of such a machine.
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Problem 95B
The travel time to work (in minutes) for an office worker has the following density function.
Calculate the variance of the travel time to work for this office worker.
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