Losses in 1995 follow the density function rx) 1-2 x-s, if x 1, and zero otherwi

Question

Losses in 1995 follow the density function rx) 1-2 x-s, if x 1, and zero otherwise, where x is the loss in millions of dollars. For the next 3 years, all claims are inflated by 10% per year. Determine the probability that a 1995 loss exceeds 2100000 dollars. [Round your answer to 4 decimals] 0.6732 Submit Answer Incorrect. Tries 2/5 Previous Tries Determine the probability that a 1997 loss exceeds 2100000 dollars. [Round your answer to 4 decimals] 08146 Submit Answer Incorrect. Tries 1/5 Previous Tries

Explanation / Answer

1)for 1995 probability that loss exceeds 2100000 =P(X>2.1)=2/x3 = 2/2.13 =0.2160

2)for 1997 ; deflated loss =2.1/(1.1)2 =1.7355

hence probability =2/1.73553 =0.3826

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