Banner Ad 1

Collapse

Announcement

Collapse
No announcement yet.

edu-2010-spring-p-ques Q129

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • edu-2010-spring-p-ques Q129

    I am totally lost on this. Can someone explain the solution in a different way? More specifically, where is the 150 coming from?
    Attached Files
    neutrino33
    Actuary.com - Level I Poster
    Last edited by neutrino33; May 23 2010, 08:19 PM.

  • #2
    They say it in the explanation.

    You have 2 pieces to reimbursement, 100% between 120 and 20 (less the deductible) i.e. 1.00 * (120-20) = 100. But you don't have 100, you need to find the equivalent value for 115 so you still have 15 to account for. Now for losses above 120, you get reimbursed 50% so since you have 15 left over:

    15 = .5*(X - 120) i.e. X = 150

    Comment

    Working...
    X