SOA Exam FAM Sample Question 92
Study guide: Exam FAM
You are given:
(i) Claim frequency follows a Poisson distribution.
(ii) Claim frequency and claim severity are independent.
(iii) The probability density function of claim severity is
f(x) = \frac{3(100)^3}{x^4}, \quad x > 100
Calculate the expected number of claims needed so the observed total cost of claims is within 5% of the true value with probability 0.95.
- A) 1444
- B) 1537
- C) 2049
- D) 3586
- E) 8196
Answer this question and see the worked solution