Total number of losses is 2,000, and total number of losses above 6,000 is
300, so
E[X:6,000] =1,810=(300*6,000+total losses below 6,000)/2,000
From here, total losses below 6,000 can be calcualted to be 1,820,000.
Then,
E[X:7,000]=(total losses below 7,000 + (number of losses above
7,000)*7,000)/2,000
=(total losses below 6,000 + 200,000 +270*7,000)/2,000
= (1,800,000 +200,000+1,890,000)/2,000
= 1,955
Doris
Neil Narale <nnarale@julian.uwo.ca> on 04/16/99 07:56:30 PM
To: studygroup4b <studygroup4b@lists.casact.org>
cc: (bcc: Doris Schirmacher/Re/Germany/Zurich)
Subject: Fall 1997 Question 8
8) 1700 claims x < $6000
30 claims $7000 > x > $6000 <----- Total amount $200,000
270 claims x > $7000
E[X;6000] = $1810
Find E[X;7000].