CAS Exam MAS-I Fall 2019, Question 13

Study guide: Exam MAS-I

An actuary is using the inversion method to simulate the waiting time until the 5^{\text{th}} event of a Poisson process with a rate \lambda = 1.

Five random draws from U(0, 1) are provided below:

0.2, 0.7, 0.8, 0.3, 0.5

Calculate the simulated waiting time until the 5^{\text{th}} event.

• A) Less than 2.5
• B) At least 2.5, but less than 3.5
• C) At least 3.5, but less than 4.5
• D) At least 4.5, but less than 5.5
• E) At least 5.5

Answer this question and see the worked solution

Concepts tested

• Exponential Distribution
• Poisson Process
• Interarrival Time
• Cumulative Distribution Function (CDF)
• Inversion Method

More questions from this set

• CAS Exam MAS-I Fall 2019, Question 12
• CAS Exam MAS-I Fall 2019, Question 14