hi, I'm looking at some past questions in revision booklet 2 and I was wondering if you could tell me why for one calculation of E[Y] you divide by P(X>b number) and for the other one you dont? I cant seem to figure it out..... as far as i can see they should calculate the value of int ( (x-b) f(x)) with limits b to infinity Thanks
you are not alone talked about a couple of times here before http://www.acted.co.uk/forums/showthread.php?t=2927 http://www.acted.co.uk/forums/showthread.php?t=1534 main idea is , the thing we sometimes divide by , represents conditioning on the event occurring. In the April 02 question 4 (couldn't find the other question you were talking about it isn't April 01 anyway???) we are conditioning on the fact the insurance pays any of the claim i.e. claim > the deductible , so we divide by the P ( claim > 100 ). The problem is the questions don't exactly make it clear when your supposed to condition .
ok thanks for that, slightly clearer now, hopefully it wont make the difference between pass and fail but at least i now know that i'm not going senile! i just couldnt spot what was wrong. dont have my notes with me right now to tell you what paper the second question was in, i'll fill that one in later
