Hi, I'm stuck on question 12, part i of the practise questions for ch7. Where it says in the question "calculate the expected number of policies giving rise to the different number of claims assuming a poisson model" - I don't understand what formula they are using in the solutions. Thanks for you help in advance Ayesha
I think you mean Question 11 Instead of calculating each Poisson probability from scratch, they have used a recursion formula \(P(X=x) = \frac{\mu}{x} P(X=x-1)\) to save time. You can use the usual formula from the Tables and still get the same answer.