SOA Exam P Sample Question 48
Study guide: Exam P-1
A manufacturer's annual losses follow a distribution with density function
f(x) = \begin{cases} \frac{2.5(0.6)^{2.5}}{x^{3.5}}, & x > 0.6 \\ 0, & \text{otherwise.} \end{cases}
To cover its losses, the manufacturer purchases an insurance policy with an annual deductible of 2.
Calculate the mean of the manufacturer's annual losses not paid by the insurance policy.
- A) 0.84
- B) 0.88
- C) 0.93
- D) 0.95
- E) 1.00
Answer this question and see the worked solution