SOA Exam P Sample Question 612
Study guide: Exam P-1
For a certain product, the time until failure is modeled by a distribution with density function
f(x) = \begin{cases}
ce^{-cx}, & x > 0 \\
0, & \text{otherwise,}
\end{cases}where c is a constant. The median time until failure is 10 years.
The product has a warranty that provides a payment of 35 if failure occurs in the first 5 years, 25 if failure occurs after 5 years, but within 7.5 years, and 0 if failure occurs after 7.5 years.
Calculate the expected payment under the warranty.
- A)
13.06 - B)
17.13 - C)
20.84 - D)
24.58 - E)
27.56
Answer this question and see the worked solution