Question-TIA A.2 #17

[BAIINinja]

Hello, I know there is a video, but I am stuck at work and my computer can not handle the video. Losses can be 100, 200, or 300 with probs .2, .2, .6

Deductible = 150, Y is the claim payment per payment find Var (Y).

I have gotten the to the point where I know there are only a chance of 2 different payments, 50 at 25% and 150 at 75%. This would make it Binomial.

Lets have p = .25 and q= .75

The pdf solutions have (150-50)^2*p*q ..... I do not understand why it is (150-50)^2

Any light shed on this would be awsome.

[Actuarialsuck]

Originally Posted by BAIINinja

Hello, I know there is a video, but I am stuck at work and my computer can not handle the video. Losses can be 100, 200, or 300 with probs .2, .2, .6

Deductible = 150, Y is the claim payment per payment find Var (Y).

I have gotten the to the point where I know there are only a chance of 2 different payments, 50 at 25% and 150 at 75%. This would make it Binomial.

Lets have p = .25 and q= .75

The pdf solutions have (150-50)^2*p*q ..... I do not understand why it is (150-50)^2

Any light shed on this would be awsome.

Bernouilli shortcut

[BAIINinja]

Ok, I will put that to memory, Thank you.

[icon41gimp]

You'll use it often enough that it will become 2nd nature.

[Colonel Smoothie]

2nd nature just like when Ralph Macchio was waxing that car.

[BAIINinja]

....any analogy with Ralph Macchio is awesome

[truonda]

Nice to see you here too BAII! Definitely a shortcut worth etching to the back of your mind.

[Colonel Smoothie]

Originally Posted by truonda

Nice to see you here too BAII! Definitely a shortcut worth etching to the back of your mind.

You might not want to use a BAII on this test, BAII.