Exam P Practice Question 901
Study guide: Exam P-1
A benefit payment to an insured is modeled by the random variable B. Given a loss X that is exponentially distributed with mean 5, the benefit is:
B = \begin{cases} 0 & X < 2 \\ X - 2 & 2 \leq X < 5 \\ 3 & X \geq 5 \end{cases}
Calculate E[B].
- A) 1.22
- B) 1.51
- C) 1.85
- D) 2.00
- E) 2.22
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