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Old 02-03-2019, 05:03 PM
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Gandalf Gandalf is offline
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Suppose the warranty paid 5 at the first failure if before 2 or after 10. Would you ignore the probability of those when calculating the 90th percentile? Presumably you would not ignore that probability.

So why would you propose ignoring that probability when the warranty pays 0 for those failure times?

You are treating the question as asking the 90th percentile of the payment, given than a nonzero payment was made.
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