Hi, In chapter 4 question 4.9, can someone tell me how did we arrive at the E(Y²) of treaty 2. Why did we use M0, M1 and M2, and why did we use (x-M)²? Thanks in advance. Regards, Shyam
Y here refers to the reinsurer, hence the (x-M)². The M0, M1 and M2 are the definitions given in the previous example which this question is based on.
