I have a question about P/1 exam, i hope someone can give me a clue, thanks!!

That is one of the example in Actex P/1 exam study manual, example 10-3 p. 239.

The probability of a claim amount given a claim occurs is given,

My question is how the equation Var[Xi] comes from?? Can someone can explain to me?? Thanks for all your help, your advise is very important to me!!

T

That is one of the example in Actex P/1 exam study manual, example 10-3 p. 239.

The probability of a claim amount given a claim occurs is given,

*qi*, and the mean and variance of the conditional distribution of claim amount given a claim occurs is given,*E[ Bi ]*,*Var [ Bi ]*. When the loss random variable is given in this form, we have for policy i, E[ Xi ] = qi*E [Bi], and__Var [Xi] = qi*(1-qi)*(E[Bi])^2 + qi*Var[Bi]__My question is how the equation Var[Xi] comes from?? Can someone can explain to me?? Thanks for all your help, your advise is very important to me!!

T

## Comment