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ABy Admin
Jun 01'22

Exercise

Ground-up claim severity has a uniform distribution. When a per-claim deductible equal to r times the upper bound for the severity distribution is in effect, the claim size variance is 0.75(1-r)2 times the full coverage claim size variance. Determine the value of r.

  1. [0.55,0.6]
  2. [0.68,0.73]
  3. [0.75,0.79]
  4. [0.82,0.85]
  5. [0.9,0.95]
ABy Admin
Jun 01'22

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