SOA Exam P Sample Question 220
Study guide: Exam P-1
A motorist just had an accident. The accident is minor with probability 0.75 and is otherwise major.
Let b be a positive constant. If the accident is minor, then the loss amount follows a uniform distribution on the interval [0, b]. If the accident is major, then the loss amount follows a uniform distribution on the interval [b, 3b].
The median loss amount due to this accident is 672.
Calculate the mean loss amount due to this accident.
- A) 392
- B) 512
- C) 672
- D) 882
- E) 1008
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