CAS Exam MAS-I Fall 2018, Question 4

Study guide: Exam MAS-I

You are given the following information about a Poisson process:

• Claims occur at a rate of 4 per month
• Each claim is independent and takes on values with probabilities below:

• The monthly claim experience is independent
• X is the aggregate claim amount for twelve months

Calculate \operatorname{Var}[X].

• A) Less than 40,000
• B) At least 40,000, but less than 80,000
• C) At least 80,000, but less than 120,000
• D) At least 120,000, but less than 160,000
• E) At least 160,000

Answer this question and see the worked solution

Concepts tested

• Aggregate Loss Model
• Poisson Distribution
• Variance
• Compound Poisson Process

More questions from this set

• CAS Exam MAS-I Fall 2018, Question 3
• CAS Exam MAS-I Fall 2018, Question 5