Actuarial Notes

SOA Exam P Sample Question 676

Study guide: Exam P-1

Two intersections of streets in a downtown area have been watched for traffic violations. Suppose that such violations, in any month, have frequencies X and Y at these two intersections, respectively.

X and Y are modeled by two Poisson distributions with means 15 and 30, respectively. The numbers of monthly violations at the two intersections in all months are mutually independent.

Calculate the variance of the total number of traffic violations at these two intersections in a three-month period.

  • A) 45
  • B) 135
  • C) 225
  • D) 900
  • E) 1125

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