Question

The number of losses per year when there is no deductible follows a negative binomial distribution with r = 2 and eta =0.8 ii) The severity of each loss before coverage modifications is uniformly on (0, 2500] . The deductible is raised to x . The probability of zero claims under the new deductible is 0.390625 . Determine x .

Name: the number of losses per year when there is no deductible follows a negative binomial distribution with r 2 and beta 08 ii the severity of each loss before coverage modifications is uniforml 33703
Uploaded: 2023-02-11T16:38:27-08:00
Duration: 3 min 44 s
Channel: Sri K
Description: the number of losses per year when there is no deductible follows a negative binomial distribution with r 2 and beta 08 ii the severity of each loss before coverage modifications is uniforml 33703

          The number of losses per year when there is no deductible follows a negative binomial distribution with r = 2 and eta  =0.8 ii) The severity of each loss before coverage modifications is uniformly on (0, 2500] . The deductible is raised to x . The probability of zero claims under the new deductible is 0.390625 . Determine x .

Added by Miriam S.

Elementary Statistics a Step by Step Approach

Allan G. Bluman 9th Edition

Instant Answer

Solved by Expert Sri K

02/11/2023

Step 1

This can be calculated using the negative binomial distribution formula: P(X = k) = (r+k-1 choose k) * (1-\beta)^r * \beta^k where r = 2, \beta = 0.8, and k = 0 (since we are looking for zero claims). Plugging in the values, we get: P(X = 0) = (2+0-1 choose 0) Show more…

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The number of losses per year when there is no deductible follows a negative binomial distribution with r = 2 and eta =0.8 ii) The severity of each loss before coverage modifications is uniformly on (0, 2500] . The deductible is raised to x . The probability of zero claims under the new deductible is 0.390625 . Determine x .