CAS Exam MAS-I Spring 2019, Question 3
Study guide: Exam MAS-I
You are given the following information:
- Accidents follow a compound Poisson process
- Accidents occur at the rate of
\lambda = 40per day - Accident severity follows an exponential distribution with
\theta = 1{,}000 - The insurance payment for each accident is subjected to a deductible
V_1is the variance of daily aggregate payments with a deductible of 100 per accidentV_2is the variance of daily aggregate payments with a deductible of 500 per accident
Calculate the ratio V_2 / V_1.
- A) Less than 0.5
- B) At least 0.5, but less than 0.6
- C) At least 0.6, but less than 0.7
- D) At least 0.7, but less than 0.8
- E) At least 0.8
Answer this question and see the worked solution