SOA Exam FAM Sample Question 35
Study guide: Exam FAM
The number of annual losses has a Poisson distribution with a mean of 5. The size of each loss has a Pareto distribution with \theta = 10 and \alpha = 2.5. An insurance policy for the losses has an ordinary deductible of 5 per loss.
Calculate the expected value of the aggregate annual payments for this policy.
- A) 8
- B) 13
- C) 18
- D) 23
- E) 28
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