An insurer has a pool of identical policyholders each with a potential claim that fits the ideal
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Question:
An insurer has a pool of identical policyholders each with a potential claim that fits the ideal characteristics of insurability. There are policyholders in the pool. Any single
policyholder has an expected claim of and the claims standard deviation is The insurer collects premiums at the beginning of the year, and pays claims at the end of the year.
Premium is per insurer. The insurer invests premiums at an annual rate of percent. What is the probability a very close approximation will suffice that the insurer will not
have sufficient money to pay claims?
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