SOA Exam FAM Sample Question 81
Study guide: Exam FAM
Annual losses in Year 1 follow an exponential distribution with mean \theta. An inflation factor of 20% applies to all Year 2 losses.
The ordinary deductible for Year 1 is 0.25\theta. The deductible is doubled in Year 2.
Calculate the percentage increase in the loss elimination ratio from Year 1 to Year 2.
- A) 19%
- B) 28%
- C) 37%
- D) 54%
- E) 78%
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