SOA Exam P Sample Question 511
Study guide: Exam P-1
Each loss under a disability insurance policy can range from 0 to 1. The probability density function of a loss is proportional to the fifth power of the loss.
The insurer plans to implement a constant deductible d for each loss so that the probability that the insurer pays something for at least one of the next two losses has a specified value P. Assume that the next two losses are independent.
Determine the deductible d the insurer should charge, in terms of P.
- A)
\sqrt[5]{P} - B)
\sqrt[10]{P} - C)
\sqrt[10]{1-P} - D)
\sqrt[12]{P} - E)
\sqrt[12]{1-P}
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