CAS Exam 8 Fall 2014, Question 13
Study guide: Exam 8
A Table M is constructed based on the experience of the following 10 similarly sized risks:
| Risk | Aggregate Loss Ratio |
|---|---|
| 1 | 10% |
| 2 | 30% |
| 3 | 35% |
| 4 | 40% |
| 5 | 60% |
| 6 | 75% |
| 7 | X% |
| 8 | 90% |
| 9 | 110% |
| 10 | 120% |
X is the aggregate loss ratio for Risk 7.
Assume:
75\% \le X \le 90\%- The Table M charge at entry ratio 1.5 is 0.05.
Calculate X.
Part a (2 points)
Answer this question and see the worked solution