SOA Exam P Sample Question 70
Study guide: Exam P-1
The total claim amount for a health insurance policy follows a distribution with density function
f(x) = \frac{1}{1000}e^{-(x/1000)}, \quad x > 0.
The premium for the policy is set at the expected total claim amount plus 100.
If 100 policies are sold, calculate the approximate probability that the insurance company will have claims exceeding the premiums collected.
- A) 0.001
- B) 0.159
- C) 0.333
- D) 0.407
- E) 0.460
Answer this question and see the worked solution