Moments of Loss and Payment Random Variables
Free SOA Exam P (Probability) lesson in Univariate Random Variables. 23 min read, ~3,454 words.
Variance of payment:; compute both moments separately. Second moment with cap: variable-region integral plus for the capped region. Coinsurance enters squared:, so 80% coinsurance multiplies variance by 0.64. Exponential shortcut: via the memoryless property. Per-payment exponential variance is constant: regardless of the deductible. Deductible increases CV; benefit limit decreases variance...
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Example 5
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 2f
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