RMI 2101 Lecture 4: RMI 2101 Topic 4 Class Notes

• School: Temple University
• Department: Risk Management and Insurance
• Course: RMI 2101
• Professor: Mccloskey

Document Summary

Topic 4: measurement and evaluation of exposures to loss. 21047 amount of losses that do occur (severity) Total 21047 of losses in a given time period (frequency & severity) Measures the likelihood of an event (chance/odds) Ranges from 0 to 1 (p=1 certain, p=0 impossible) P [ a and b do not arrive ] = (. 2) * (. 2) = . 04. 2+ events are said to be m. e. if they cannot occur at the same time i. e. b arrive or not arrive; fate of shipment b is a m. e. event. P [ b arrives or b does not arrive ] = 1. P [ b arrives ] + p [ b not arrive] = 1. P [ b arrives ] + (. 2) = 1 p [ b arrives ] = . 8. Sum of individual probabilities for those outcomes must equal 1 (100%) Can be deduced in advance (i. e. coin flip, dice roll)