SOA Exam FAM Sample Question 26
Study guide: Exam FAM
The unlimited severity distribution for claim amounts under an auto liability insurance policy is given by the cumulative distribution:
F(x) = 1 - 0.8e^{-0.02x} - 0.2e^{-0.001x}, \quad x \ge 0
The insurance policy pays amounts up to a limit of 1000 per claim.
Calculate the expected payment under this policy for one claim.
- A) 57
- B) 108
- C) 166
- D) 205
- E) 240
Answer this question and see the worked solution