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Math Help - Exp. Distribution

  1. #1
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    Exp. Distribution

    An insurance company does not pay 75 percent of claims. For the remaining claims, they are exponentially distributed with a mean of 10. What is the expected claim payout.


    thanks
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  2. #2
    Grand Panjandrum
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    Quote Originally Posted by PensFan10 View Post
    An insurance company does not pay 75 percent of claims. For the remaining claims, they are exponentially distributed with a mean of 10. What is the expected claim payout.


    thanks
    The distribution of the remaining 25% is irrelevant, only the mean:

    0 \times 0.75 + 10 \times 0.25

    CB
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