SOA Exam P Sample Question 433
Study guide: Exam P-1
An insurance company sells flood and fire insurance. This year, the company's profit from selling flood insurance is normally distributed, and its profit from selling fire insurance is normally distributed with three times the mean and three times the standard deviation as from flood insurance.
The profits from the two types of insurance are independent. The probability that the company earns a positive profit from selling flood insurance this year is 0.67.
Calculate the probability that the insurance company earns an overall positive profit this year.
- A)
0.71 - B)
0.73 - C)
0.81 - D)
0.92 - E)
0.96
Answer this question and see the worked solution