(5 marks) Let S be an aggregate model, with a frequency distribution N and a severity...
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(5 marks) Let S be an aggregate model, with a frequency distribution N and a severity distribution X. Assume that N is a Binomial distribution with parameters m = 6 and p = 0, and X is a geometric distribution with parameter a. It is known that P(S = 0) = 0.5 and P(S = 1) = 0.05. Determine the value of the parameters and a. Hint: Use the probability generating function from the com- pound frequency distribution described in Ch. 7, Section 1. (5 marks) Let S be an aggregate model, with a frequency distribution N and a severity distribution X. Assume that N is a Binomial distribution with parameters m = 6 and p = 0, and X is a geometric distribution with parameter a. It is known that P(S = 0) = 0.5 and P(S = 1) = 0.05. Determine the value of the parameters and a. Hint: Use the probability generating function from the com- pound frequency distribution described in Ch. 7, Section 1.
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