ABy Admin
Jun 01'22

Exercise

An insurer sells coverage on two types of risks, type A and type B, with the following loss probabilities:

Type P(L = 0) P(L = 100)
A 0.3 0.7
B 0.6 0.4

Assuming both types of risk are equally likely to be selected, determine the probability that the loss will equal to $100 for a randomly selected risk.

  • 0.4
  • 0.45
  • 0.5
  • 0.55
  • 0.6
ABy Admin
Jun 01'22

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