SOA Exam P Sample Question 651
Study guide: Exam P-1
A dental patient buys insurance that reimburses 100% of dental losses in Year 1 and 60% of dental losses in Year 2. The table below shows the joint probability function of the patient's losses in both years.
| Year 2 \ Year 1 | 0 | 2 | 5 | 10 | Total |
|---|---|---|---|---|---|
| 0 | 0.4 | 0.23 | 0.12 | 0.05 | 0.8 |
| 2 | 0.05 | 0.03 | 0.012 | 0.008 | 0.1 |
| 5 | 0.03 | 0.025 | 0.004 | 0.001 | 0.06 |
| 10 | 0.02 | 0.015 | 0.004 | 0.001 | 0.04 |
| Total | 0.5 | 0.3 | 0.14 | 0.06 |
Calculate the patient's expected unreimbursed loss in this two-year period.
- A)
0.36 - B)
0.76 - C)
0.90 - D)
1.70 - E)
2.80
Answer this question and see the worked solution