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Ground-up losses follow a uniform distribution on (0, 800]. Consider the following two reinsurance treaties: Treaty A: In a surplus share reinsurance treaty, the reinsurer pays 50% of each loss exceeding 400 in the layer of (400, 600], and 80% of each loss exceeding 600 in the layer of (600, 800] to the primary insurer. Treaty B: In a quota share reinsurance treaty, the reinsurer pays 100R% of each loss to the primary insurer. The expected total amounts shared by the reinsurer based on the two reinsurance treaties are the same. Determine R.

Ground-up losses follow a uniform distribution on (0, 800]. Consider the following two reinsurance treaties: Treaty A: In a surplus share reinsurance treaty, the reinsurer pays 50% of each loss exceeding 400 in the layer of (400, 600], and 80% of each loss exceeding 600 in the layer of (600, 800] to the primary insurer. Treaty B: In a quota share reinsurance treaty, the reinsurer pays 100R% of each loss to the primary insurer. The expected total amounts shared by the reinsurer based on the two reinsurance treaties are the same. Determine R.

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Ground-up losses follow a uniform distribution on (0, 800]. Consider the following two reinsurance treaties: Treaty A: In a surplus share reinsurance treaty, the reinsurer pays 50% of each loss exceeding 400 in the layer of (400, 600], and 80% of each loss exceeding 600 in the layer of (600, 800] to the primary insurer. Treaty B: In a quota share reinsurance treaty, the reinsurer pays 100R% of each loss to the primary insurer. The expected total amounts shared by the reinsurer based on the two reinsurance treaties are the same. Determine R. Possible Answers A B с D E Less than 5% At least 5%, but less than 8% At least 8%, but less than 11% At least 11%, but less than 13% At least 13%
Transcribed Image Text:Ground-up losses follow a uniform distribution on (0, 800]. Consider the following two reinsurance treaties: Treaty A: In a surplus share reinsurance treaty, the reinsurer pays 50% of each loss exceeding 400 in the layer of (400, 600], and 80% of each loss exceeding 600 in the layer of (600, 800] to the primary insurer. Treaty B: In a quota share reinsurance treaty, the reinsurer pays 100R% of each loss to the primary insurer. The expected total amounts shared by the reinsurer based on the two reinsurance treaties are the same. Determine R. Possible Answers A B с D E Less than 5% At least 5%, but less than 8% At least 8%, but less than 11% At least 11%, but less than 13% At least 13%
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