SOA Exam P Sample Question 510
Study guide: Exam P-1
A company insures two buildings for one year. Its insurer will pay the value of a loss, rounded down to the nearest million. Let X and Y represent the insurer's payments in millions on each of the buildings. The joint probability function is:
Y \ X |
0 | 1 | 2 |
|---|---|---|---|
| 0 | 0.38 | 0.10 | 0.02 |
| 1 | 0.16 | 0.11 | 0.03 |
| 2 | 0.06 | 0.09 | 0.05 |
Calculate the expected value of the maximum of X and Y.
- A)
0.33 - B)
0.70 - C)
0.87 - D)
1.20 - E)
2.00
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