SOA Exam P Sample Question 313
Study guide: Exam P-1
The probability that a homeowners policyholder reports a property claim in a year increases by 25% per year. Conversely, the probability that a homeowners policyholder reports a liability claim in a year decreases by 25% per year.
The probability that a homeowners policyholder reports both a property claim and a liability claim in Year 1 is 0.01. The event that a homeowners policyholder reports a property claim is independent of the event that the policyholder reports a liability claim.
Calculate the probability that a homeowners policyholder reports both a property claim and a liability claim in Year 9.
- A) 0.005
- B) 0.006
- C) 0.010
- D) 0.014
- E) 0.015
Answer this question and see the worked solution