SOA Exam FAM Sample Question 44
Study guide: Exam FAM
The repair costs for boats in a marina have the following characteristics:
| Boat type | Number of boats | Probability that repair is needed | Mean of repair cost given a repair | Variance of repair cost given a repair |
|---|---|---|---|---|
| Power boats | 100 | 0.3 | 300 | 10,000 |
| Sailboats | 300 | 0.1 | 1000 | 400,000 |
| Luxury yachts | 50 | 0.6 | 5000 | 2,000,000 |
At most one repair is required per boat each year. Repair incidence and cost are mutually independent.
The marina budgets an amount, Y, equal to the aggregate mean repair costs plus the standard deviation of the aggregate repair costs.
Calculate Y.
- A) 200,000
- B) 210,000
- C) 220,000
- D) 230,000
- E) 240,000
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