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AAdmin
Jun 02'22

Exercise

An insurance policy offers coverage for three years. You are given the following about the annual loss:

  • Annual losses are independent
  • The annual loss has an exponential distribution with mean 500

Determine the mode of the loss distribution for the three year coverage.

  1. 500
  2. 750
  3. 1,000
  4. 2,000
  5. 2,500
AAdmin
Jun 02'22

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