SOA Exam P Sample Question 167
Study guide: Exam P-1
Insurance companies A and B each earn an annual profit that is normally distributed with the same positive mean. The standard deviation of company A's annual profit is one half of its mean.
In a given year, the probability that company B has a loss (negative profit) is 0.9 times the probability that company A has a loss.
Calculate the ratio of the standard deviation of company B's annual profit to the standard deviation of company A's annual profit.
- A) 0.49
- B) 0.90
- C) 0.98
- D) 1.11
- E) 1.71
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