SOA Exam FAM Sample Question 90
Study guide: Exam FAM
You are given the following observations on 185 small business policies:
| Number of Claims | Number of Policies |
|---|---|
| 0 | 80 |
| 1 or more | 105 |
The number of claims per policy follows a Poisson distribution with parameter \lambda.
Using the maximum likelihood estimate of \lambda, determine the estimated probability of a policy having fewer than two claims.
- A) 0.79
- B) 0.84
- C) 0.89
- D) 0.95
- E) 0.98
Answer this question and see the worked solution