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Question: the loss l due to a boat accident is exponentially...

Question details

The loss L due to a boat accident is exponentially distributed. Boat insurance policy A covers up to 1 unit for each loss. Boat insurance policy B covers up to 2 units for each loss. The probability that a loss is fully covered under policy B is 1.9 times the probability that it is fully covered under policy A. Calculate the variance of L.

The answer is 100[2e^−0.1d −e^−0.2d]

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