Question

Problem 30.17 t Losses covered by an insurance policy have the density function 0.001 0T 1000 j(r)-s otherwise. An insur ance company reimburses losses in excess of a deductible of 250. Calculate the difference between the median and the 20th percentile of the insurance company reimbursement, over all losses

Answer 1

Hence, difference between median and the 20th percentile = $(500 - 200) = $300. This will be the reimbursement value by the insurance company.