SOA Exam P Sample Question 51
Study guide: Exam P-1
An auto insurance company insures an automobile worth 15,000 for one year under a policy with a 1,000 deductible. During the policy year there is a 0.04 chance of partial damage to the car and a 0.02 chance of a total loss of the car.
If there is partial damage to the car, the amount X of damage (in thousands) follows a distribution with density function
f(x) = \begin{cases} 0.5003e^{-x/2}, & 0 < x < 15 \\ 0, & \text{otherwise.} \end{cases}
Calculate the expected claim payment.
- A) 320
- B) 328
- C) 352
- D) 380
- E) 540
Answer this question and see the worked solution