Statistics Homework Solutions
Problem
#3998

Insurance example

62)In deciding upon the appropriate premium to charge, insurance companies sometimes use the exponential principle, defined as follows. With X as the random amount that it will have to pay in claims, the premium charged by the insurance company is
P=1/a In(E[e^ax])

where a is some specified positive constant. Find P when X is an exponential random variable with parameter (lambda), and a=a(lambda), where 0<(alpha)<1.

Solution
What is this?
By OTA - Overall OTA Rating
Huaizhou Wang, MA (IP) - 4.6/5
Purchase Cost Now
$2.19 CAD (was ~$7.98)
Included in Download
  • Plain text response
  • Attached file(s):
    • Solution1.doc
$2.19 Instant Download
Add to Cart
Why you can trust BrainMass.com
  • Your Information is Secure
  • Best Online Academic Help Service
  • Students find real academic Success
Related Solutions
Browse