Question

A homeowners insurance policy covers losses due to theft, with a deductible of 5. Theft losses are uniformly distributed on [0, 20].

(a) Determine the moment generating function, M(t), for t not equal to 0, of the claim payment on a theft.

(b) Compute the mean and variance of the claim payment on a theft.

(c) Find the median and 90th percentile of the claim payment on a theft

Answer 1