The most important assumption of this question is: "The exposure curves is applied to every sum insured band" is missing, in my opinion.
Then, the same exposure curve is used at every band.
I also found the question not fit with what's mentioned in the Core Reading.
Core reading mention:
G(x) = LEV(x)/ E[Y]
E[Y] here as the expected loss cost of the exposure, then Limit Expected Value at x(%) of Sum Insured will be at the G(x) of Expected Loss Cost.
But in this question, the writer of the question assume E[Y] is the expected loss cost of the band, not the expected loss cost, right?
Please let me know if I'm wrong and if so what am I missing?
Then, the same exposure curve is used at every band.
I also found the question not fit with what's mentioned in the Core Reading.
Core reading mention:
G(x) = LEV(x)/ E[Y]
E[Y] here as the expected loss cost of the exposure, then Limit Expected Value at x(%) of Sum Insured will be at the G(x) of Expected Loss Cost.
But in this question, the writer of the question assume E[Y] is the expected loss cost of the band, not the expected loss cost, right?
Please let me know if I'm wrong and if so what am I missing?