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Thread: Interpreting boundries for a Poisson Problem

  1. #1
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    Interpreting boundries for a Poisson Problem

    Hi,

    I'm have some trouble understanding why the solution to a problem requires an evaluation from "some number" to infinity. This is a problem from the published practice exams from SOA.

    I understand the solution, meaning that I can follow it. However, I don't understand why the solution requires P(x >= #) (the number (#) is specified in the problem) as part of the solution. I interpret this component to the question as P(x = #)

    I realize this doesn't mean much without seeing the problem. However, I'm not quite sure about what can and can't be posted regarding SOA published problems.

    Can I refer to this problem by number in practice exam for assistance?

    Thanks

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    Post SOA then #

    Yes you can reference to soa practice exams.

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    SOA problem

    Thanks,

    It's SOA # 67 (most recent publication)

    Why would the solution require an evaluation of the probability beyond the max days covered by the policy?

    I interpret E(pmt) as 1000*p(x=1) + 2000*p(x=2).
    The solution is 1000*p(x =1) + 2000(p x >=2)

    why p(x >= 2)?, not just p(x=2), given that's all that is covered anyway.
    I'm not interpreting the question correctly. Any input that will clear this up for me is appreciated.

    Thanks

  4. #4
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    Quote Originally Posted by Mike G View Post
    Thanks,

    It's SOA # 67 (most recent publication)

    Why would the solution require an evaluation of the probability beyond the max days covered by the policy?

    I interpret E(pmt) as 1000*p(x=1) + 2000*p(x=2).
    The solution is 1000*p(x =1) + 2000(p x >=2)

    why p(x >= 2)?, not just p(x=2), given that's all that is covered anyway.
    I'm not interpreting the question correctly. Any input that will clear this up for me is appreciated.

    Thanks
    So you are saying if it's 3 days, the policy will pay nothing? Or 4 or 5 or ... because the way it sounds to me it that it will pay 2000 if it's 3 days, and 2000 if it's 4 days and 2000 if .... Think policy limits.

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    Quote Originally Posted by NoMoreExams View Post
    So you are saying if it's 3 days, the policy will pay nothing? Or 4 or 5 or ... because the way it sounds to me it that it will pay 2000 if it's 3 days, and 2000 if it's 4 days and 2000 if .... Think policy limits.
    Gotcha...given that the event can occur for more than 2 consecutive days, I need to know that probability...yet, the policy will only cover $2000, no matter how many consecutive days the event occurs.

    thanks for restating my "stupid" interpretation and clarifying. It helped!

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