Find the ler in terms of d and the parameters

Reference no: EM131001300

1. For a certain insurer, the frequency of claims has a negative binomial distribution with an expected value of 16 and the claim severity distribution is Pareto (600, 2). The insurer is planning to introduce a per-claim deductible of 200. If this is done, what would be the reduction in the expected value of aggregate claims?

2. E(X^d)/E(X) is known as the loss elimination ratio (LER), since it gives the proportion of the risk to the insurer that is eliminated by a deductible of d. For each of the following distributions, find the LER in terms of d and the parameters. (a) X ∼ Exp(λ), (b) X ∼ Pareto(Θ, λ), (c) X ∼ Gamma(2, λ;). In each case verify that your answers have the correct limits as d approaches 0 or ∞.

Reference no: EM131001300

Questions Cloud

Possibility of predicting boiling point of compounds : What does this data set imply about the possibility of predicting the boiling point of compounds in this series on the basis of the number of carbon atoms? Compute the correlation coefficient between these two variables, even though the number n i..

Describe in your defense of use of physical punishment : Describe in detail your defense of (or arguments against) the use of physical punishment (ie. spanking, etc) as a means of correcting behavior in children

What is the expected amount of reimbursement : You are the manufacturer of a product that gives guarantees against failure. What is the expected amount of reimbursement that the insurer will pay each month?

What is the power of the flash : A particular species of copepod, a small marine crustacean, emits a flash of light consisting of 1.4x1010 photons at a wavelength of 490 nm. The flash lasts for 2.4 s. What is the power of the flash?

Find the ler in terms of d and the parameters : E(Xd)/E(X) is known as the loss elimination ratio (LER), since it gives the proportion of the risk. Find the LER in terms of d and the parameters.

Prepare a schedule showing the effect of the journal entries : Prepare a schedule showing the effect of the journal entries in requirements 1 and 2 on 2011 income before taxes.

Determine the resulting nucleus : In each of the parts of this question, a nucleus undergoes a nuclear decay. Determine the resulting nucleus in each case. Ac undergoes alpha decay. Determine the resulting nucleus. For example, if the resulting nucleus is 40/20 Ca enter ^40_20Ca.

Determine the mean-median and variance : Determine the mean, median and variance for this sample data. Construct a histogram and explain why the observed shape is not surprising, given the nature of the phenomenon in question.

What is the maximum acceleration of the passengers : Some passengers on an ocean cruise may suffer from motion sickness as the ship rocks back and forth on the waves. At one position on the ship, passengers experience a vertical motion of amplitude 1.5 m with a period of 18 s . What is the maximum ..

User Account

All Pages