Exam MAS-I Practice Question 38
Study guide: Exam MAS-I
For each pair of random variables below, determine the sign of \text{Cov}(X, Y). An option may be used more than once or not at all.
Part a (1 point)
A reserve's forecast error X is uniformly distributed on (-100, 100), and Y = X^2 is the squared error.
- A) Positive
- B) Negative
- C) Zero
- D) Cannot be determined from the information given
Part b (1 point)
A ground-up loss is exponential with mean 1,000 and is subject to a deductible of 500. X = \min(\text{loss}, 500) is the part the insured retains, and Y = \max(\text{loss} - 500, 0) is the part the insurer pays.
- A) Positive
- B) Negative
- C) Zero
- D) Cannot be determined from the information given
Part c (1 point)
Of 20 independent policies, X is the number with no claim in the year and Y is the number with at least one claim.
- A) Positive
- B) Negative
- C) Zero
- D) Cannot be determined from the information given
Part d (1 point)
X and Y are the claim amounts from two related policies, and all that is known is that they are not independent.
- A) Positive
- B) Negative
- C) Zero
- D) Cannot be determined from the information given
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