SOA Exam FAM Sample Question 38
Study guide: Exam FAM
You are given:
(i) The number of claims has probability function:
p(x) = \binom{m}{x}q^x(1 - q)^{m - x}, \quad x = 0, 1, \ldots, m
(ii) The actual number of claims must be within 1% of the expected number of claims with probability 0.95.
(iii) The expected number of claims for full credibility is 34,574.
Calculate q.
- A) 0.05
- B) 0.10
- C) 0.20
- D) 0.40
- E) 0.80
Answer this question and see the worked solution