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Foundations of Casualty Actuarial Science
the optimal strategies to follow in risky situations. The
research in this area provides recommendations as to
which optimal solutions to purchase, and which to retain.
Game theory: In this theory, each player selects a
strategy and the resulting payoff is determined by the
selected strategy in combination with the strategies
chosen by other players.
Each person attempts to maximize the utility of his or
her own payoffs, but, since the player cannot mandate
the choices of the remaining players, the optimal strategy
often involves anticipating the choices of others,
negotiating the individual selection of strategies , or
randomly selecting a strategy to prevent opponents from
getting the correct selection.
Q16. What is Poisson distribution?
Ans. Poisson distribution is a common function used to fit
claim frequency. The function is :
Pr (k) = (e-y ( yk) / k !
Where
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