SOA Exam FAM Sample Question 105
Study guide: Exam FAM
Losses follow a lognormal distribution with \mu = 7 and \sigma = 2.
A policy covering these losses makes no payment for losses below 5,000. For losses between 5,000 and 20,000, the policy pays the full amount of the loss. For losses exceeding 20,000, the policy pays 20,000.
Calculate the expected cost per loss.
- A) 2,961
- B) 3,109
- C) 3,273
- D) 3,307
- E) 3,583
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