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THE PROFESSIONAL LIFE

Do the Math

Claim amounts for wind damage to insured homes are independent random variables with common density function

where x is the amount of a claim in thousands.

Suppose 3 such claims will be made.

What is the expected value of the largest of the three claims?

  1. 2025
  2. 2700
  3. 3232
  4. 3375
  5. 4500
View Answer