SOA Exam P Sample Question 270
Study guide: Exam P-1
An industrial company provides health insurance to employees located at four different plants. Health insurance costs at each plant are independent of the costs at any other plant. Plant managers have calculated the following statistics:
| Plant | Average Cost | Standard Deviation |
|---|---|---|
| W | 2 | 1.0 |
| X | 2 | 1.0 |
| Y | 5 | 1.5 |
| Z | 7 | 2.0 |
Calculate the standard deviation of total company health insurance costs.
- A) 1.4
- B) 2.1
- C) 2.9
- D) 5.5
- E) 6.3
Answer this question and see the worked solution