Exam MAS-I Practice Question 71

Study guide: Exam MAS-I

This year's claim severities follow a gamma distribution with shape \alpha = 2 and scale \theta = 500, so the mean severity is 1,000. Next year every claim is expected to cost 10% more, with no other change.

Which distribution describes next year's claim severities?

• A) Gamma with \alpha = 2.2 and \theta = 500
• B) Gamma with \alpha = 2 and \theta = 550
• C) Gamma with \alpha = 2 and \theta = 454.55
• D) Gamma with \alpha = 2.2 and \theta = 550
• E) Gamma with \alpha = 2 and \theta = 500, shifted up by 100

Answer this question and see the worked solution

Concepts tested

• Severity Distribution
• Gamma
• Inflation

More questions from this set

• Exam MAS-I Practice Question 70
• Exam MAS-I Practice Question 72