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The power law.
Suppose that there is a 5% probability that operational risk losses of a certain type exceed $11 million. Use the power law with αα parameter equal to 1.50.
a. What is the probability of losses exceeding $19 million?
b. What is the worst-case loss at 90% confidence level?
Round your answer to two decimals.
Please help me study for a test by answering this question and showing what work/formulas used. Thanks!
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