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Discussion in 'CS2' started by Khoa, Nov 30, 2019.
Why P(0,0) and P(1,0) = 0.1 and not 0.075?
In the question, its given that if there is one claim. it goes one discount below and more than 2 claims 2 discount rate below.
Since p(0,0) is 0% discount level. This the lowest discount level possible. So probability is .075+.025=.1
Similar for P(1,0) were the discount level is 20%, so a person can come maximum of 0% discount level.
Draw a diagram and do the matrix, you might understand.
Any more help on this?