SOA Exam P Sample Question 106
Study guide: Exam P-1
Automobile policies are separated into two groups: low-risk and high-risk. Actuary Rahul examines low-risk policies, continuing until a policy with a claim is found and then stopping. Actuary Toby follows the same procedure with high-risk policies.
Each low-risk policy has a 10% probability of having a claim. Each high-risk policy has a 20% probability of having a claim. The claim statuses of polices are mutually independent.
Calculate the probability that Actuary Rahul examines fewer policies than Actuary Toby.
- A) 0.2857
- B) 0.3214
- C) 0.3333
- D) 0.3571
- E) 0.4000
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