Revision as of 21:55, 2 May 2023 by Admin (Created page with "Losses covered by an insurance policy are modeled by a uniform distribution on the interval [0, 1000]. An insurance company reimburses losses in excess of a deductible of 250....")
ABy Admin
May 02'23
Exercise
Losses covered by an insurance policy are modeled by a uniform distribution on the interval [0, 1000]. An insurance company reimburses losses in excess of a deductible of 250.
Calculate the difference between the median and the 20th percentile of the insurance company reimbursement, over all losses.
- 225
- 250
- 300
- 375
- 500
Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
ABy Admin
May 02'23
Solution: B
Before applying the deductible, the median is 500 and the 20th percentile is 200. After applying the deductible, the median payment is 500 – 250 = 250 and the 20th percentile is max(0, 200 –250) = 0. The difference is 250.
Copyright 2023. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.