Homework Help is Here – Start Your Trial Now!
Math
Probability
In an insurance company the number of claims are modelled as a Poisson process with rate X > 0. Assume that the size of all claims is a fixed amount a > 0, the initial surplus is denoted by u, with 0 < u < a. If the premium income per unit time is 1.73λa, find the probability that ruin happens at the first claim.

In an insurance company the number of claims are modelled as a Poisson process with rate X > 0. Assume that the size of all claims is a fixed amount a > 0, the initial surplus is denoted by u, with 0 < u < a. If the premium income per unit time is 1.73λa, find the probability that ruin happens at the first claim.

Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)
Functions and Change: A Modeling Approach to College Algebra (MindTap Course List)
6th Edition
ISBN:9781337111348
Author:Bruce Crauder, Benny Evans, Alan Noell
Publisher:Bruce Crauder, Benny Evans, Alan Noell
Chapter2: Graphical And Tabular Analysis
Section2.1: Tables And Trends
Problem 2TU: Suppose one canoe rents for 40,and2 is taken off the price for each additional canoe rented by a...
See similar textbooks
icon
Related questions
Question
In an insurance company the number of claims are modelled as a Poisson process with rate λ > 0. Assume that the size of all claims is a fixed amount a > 0, the initial surplus is denoted by u, with 0 < u < a. If the premium income per unit time is 1.73λa, find the probability that ruin happens at the first claim.
Transcribed Image Text:In an insurance company the number of claims are modelled as a Poisson process with rate λ > 0. Assume that the size of all claims is a fixed amount a > 0, the initial surplus is denoted by u, with 0 < u < a. If the premium income per unit time is 1.73λa, find the probability that ruin happens at the first claim.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 10 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Functions and Change: A Modeling Approach to Coll…
Functions and Change: A Modeling Approach to Coll…
Algebra
ISBN:
9781337111348
Author:
Bruce Crauder, Benny Evans, Alan Noell
Publisher:
Cengage Learning
Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage
College Algebra
College Algebra
Algebra
ISBN:
9781305115545
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
Intermediate Algebra
Intermediate Algebra
Algebra
ISBN:
9780998625720
Author:
Lynn Marecek
Publisher:
OpenStax College
Calculus For The Life Sciences
Calculus For The Life Sciences
Calculus
ISBN:
9780321964038
Author:
GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:
Pearson Addison Wesley,
SEE MORE TEXTBOOKS