4. You are given: (i) The number of claims follows a negative binomial distribution with parameters...

 

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4. You are given: (i) The number of claims follows a negative binomial distribution with parameters r and B = 3. (ii) Claim severity (Y) has the following distribution: Pr(Y = 1) = 0.5, Pr(Y = 10) = 0.3, Pr(Y = 100) = 0.2 (iii) The number of claims is independent of the severity of claims. Calculate the expected number of claims needed for aggregate losses to be within 10% of expected aggregate losses with 95% probability. 4. You are given: (i) The number of claims follows a negative binomial distribution with parameters r and B = 3. (ii) Claim severity (Y) has the following distribution: Pr(Y = 1) = 0.5, Pr(Y = 10) = 0.3, Pr(Y = 100) = 0.2 (iii) The number of claims is independent of the severity of claims. Calculate the expected number of claims needed for aggregate losses to be within 10% of expected aggregate losses with 95% probability.

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