Exam P Practice Question 960
Study guide: Exam P-1
Ground-up losses in the current year follow an exponential distribution with mean 1000. All losses are subject to an ordinary deductible of 500.
Next year every loss is expected to increase by 10%, while the deductible stays at 500.
Calculate the percentage increase in the insurer's expected payment per loss.
- A)
10.0\% - B)
11.0\% - C)
12.5\% - D)
15.1\% - E)
18.2\%
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