SOA Exam P Sample Question 674
Study guide: Exam P-1
A dental patient anticipates needing X fillings next year, where X is Poisson distributed with mean 3. The patient has a choice of dental insurance policies that reimburse different numbers of fillings next year, as shown in the table below.
| Policy | A | B | C | D | E |
|---|---|---|---|---|---|
| Maximum number of fillings reimbursed next year | 2 | 3 | 4 | 5 | 6 |
Policies that reimburse a larger maximum number of fillings also charge higher premiums.
The patient wants at least a 75% probability of having all fillings reimbursed next year.
Determine the lowest premium policy that the patient should choose.
- A) Policy A
- B) Policy B
- C) Policy C
- D) Policy D
- E) Policy E
Answer this question and see the worked solution