Thread: #4 Nov 2003
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Old 11-05-2003, 04:17 PM
Tommy Vercetti Tommy Vercetti is offline
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Quote:
Originally Posted by Woody
Quote:
Originally Posted by Tommy Vercetti
I work it the same way as woody.
#31 is a simular question, but i can't work it out
Tommy, you want Pr (L>0)<=0.05. So you need to calc E[L] and Var[L].

E[L] is Ax-pi(a-duex) = 0.24905-(0.025)[(1-0.24905)(1.06)/.06] = -0.082619 for one policy, -0.082619t for t policies.

Var[L] = (1+P/d)^2[2Ax-Ax^2] = [1+(0.025)(1.06)/.06]^2[0.09476-0.24905^2] = 0.0680346 for one policy, 0.0680346t for t policies.

So, when normalizing, 0-(-0.082619t)/(0.0680346t)^(0.5) = 1.645. You then get 0.42907(t^(0.5))=0.082619t. Solving for t you get 26.97. So answer is B, 27.
Sh!t.
For some reason, I work the same as you but keep getting the wrong ans from calculator
Now the calculator works.
sux.
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