Thread: Exp. Distribution
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Old July 2nd, 2009, 10:30 PM
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CaptainBlack CaptainBlack is offline
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Originally Posted by PensFan10 View Post
An insurance company does not pay 75 percent of claims. For the remaining claims, they are exponentially distributed with a mean of 10. What is the expected claim payout.


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The distribution of the remaining 25% is irrelevant, only the mean:

0 \times 0.75 + 10 \times 0.25

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