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Foundations of Casualty Actuarial Science
7. The binomial distribution function is expressed as.
P1(k) = (Nk) pK x Qn-k
What do N, K, p and q stand for?
Ans.
N = Number of possible occurrences
K = Number of occurrences per year
P = Expected probability of one occurrence
q = Expected probability of one non occurrence
8. The specific exposure unit for a given type of insurance
depends on the following factors among others.
A. Reasonableness
B. Ease of determination
C. Immunity from change
D. Historical practice
Which of the above, if any is untrue?
Ans. C
9. The different ways of categorizing risk are as follows:-
A. Objective Risk
B. Subjective Risk
C. Pure Risks
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