SOA Exam P Sample Question 577
Study guide: Exam P-1
A homeowners insurance company pays claims only for thefts and fires. This year, the company's total theft losses are normally distributed with mean 100 and standard deviation 40. The company's total fire losses are normally distributed with mean 150 and standard deviation 30. Theft losses are independent of fire losses.
Calculate the coefficient of variation for the company's combined theft and fire losses this year.
- A)
0.20 - B)
0.28 - C)
0.30 - D)
0.40 - E)
0.60
Answer this question and see the worked solution
Concepts tested
- Linear Combinations of Random Variables
- Variance and Standard Deviation
- Independent Random Variables