SOA Exam P Sample Question 64
Study guide: Exam P-1
Claim amounts for wind damage to insured homes are mutually independent random variables with common density function
f(x) = \begin{cases} \frac{3}{x^4}, & x > 1 \\ 0, & \text{otherwise,} \end{cases}
where x is the amount of a claim in thousands.
Suppose 3 such claims will be made.
Calculate the expected value of the largest of the three claims.
- A) 2025
- B) 2700
- C) 3232
- D) 3375
- E) 4500
Answer this question and see the worked solution