For the question 10i) In the examiner report, it states that P(two claims) = 45 x 0.12 x 0.98 = 0.1937 May I know what is the '45' in this equation? Thanks in advance.
Hi That's the number of combinations of any two policies claiming out of a portfolio of 10 policies. In Excel this would be: =COMBIN(10,2)
When there's a probability of success, p, and an experiment is run n times, the number of successes follows a binomial distribution binom(n,p) by definition.
