Question: 1: A firm estimates that, for each exposure unit, it has an 80 percent chance of having $0 in losses, a 15 percent chance of

1: A firm estimates that, for each exposure unit, it has an 80 percent chance of having $0 in losses, a 15 percent chance of having losses of $10,000 , and a 5 percent chance of having losses equal to $30,000. In this case, loss severity per exposure unit is:

2: A firm estimates that, for each exposure unit, it has an 80 percent chance of having $0 in losses , a 15 percent chance of having losses of $10,000, and a 5 percent chance of having losses equal to $30,000. In this case, the 95 percent probable maximum loss (PML ) for each exposure unit is:

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