Losses are exponentially distributed with mean 10. What is the variance of the amount paid per loss on a policy with a deductible of 10, including losses below the deductible?
For exponential, variance is mean squared, but does the deductible change the variance here? I know that the payment is zero when the loss is below 10. I know what f(x) is. If the answer is not 100 then I think I might need some help setting up how to solve this one.
For exponential, variance is mean squared, but does the deductible change the variance here? I know that the payment is zero when the loss is below 10. I know what f(x) is. If the answer is not 100 then I think I might need some help setting up how to solve this one.
is the answer 100? or is this problem more complicated than that?
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