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ABy Admin
Jun 01'22

Exercise

An insurer sells an annual policy with a claim frequency with the following distribution:

[[math]] p_k = \binom{4}{k}q^k(1-q)^{4-k}. [[/math]]

The parameter [math]q[/math] is unknown but your prior beliefs indicate that it has the following density function on [0,1]:

[[math]] 12 \, q^2(1-q). [[/math]]

Determine the expected annual claim frequency.

  1. 0.6
  2. 2.3
  3. 2.4
  4. 3.25
  5. 4
ABy Admin
Jun 01'22

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