SOA Exam P Sample Question 448
Study guide: Exam P-1
A policyholder sustains one loss covered by policy A and a second loss covered by policy B. The two losses are independent and uniformly distributed on the interval [0,10]. Each policy has a deductible of 5.
Calculate the probability that the larger of the two claim payments does not exceed t, for 0 \leq t \leq 5.
- A)
\left(\dfrac{t}{5}\right)^2 - B)
\left(\dfrac{t}{10}\right)^2 - C)
\dfrac{5+t}{10} - D)
\left(\dfrac{5+t}{10}\right)^2 - E)
1 - \left(\dfrac{5-t}{10}\right)^2
Answer this question and see the worked solution