Thread: SOA #87
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Old 12-21-2018, 02:10 PM
joelcheung joelcheung is offline
Join Date: Mar 2018
Location: Singapore
Studying for Exam STAM
College: Singapore Management University, sophomore
Posts: 7
Default SOA #87

Looking at the 6th line in the solution, i.e. E(X-20)+ = E(X) - ....

I understand that this line is using the formula E[(X-20)+] = E(X) - E[(X^20)],
but how does that second part of the 6th line equate to E[(X^20)]??

And for this particular question, can I use the survival function (derived by finding the distribution function F(x) from the f(x) in the solution and then S(x)= 1 - F(x)), and then integrating the survival function from 20 to 80 for the flat f(x) portion + integrating the survival function from 82 to 120 for the declining f(x) portion?

Thank you!
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