Gce Model Questions Vol1 2017 Commerce Question 47
Practice objective / multiple choice question 47 from the 2017 Gce Model Questions Vol1 Commerce examination.
An insurer offers a motor insurance policy that covers loss up to ₦500 000 with a deductible of ₦50 000. The probability that a claim occurs in a year is 0.02. If a claim occurs, the loss amount follows a uniform distribution between ₦0 and ₦800 000. The insurer wishes to set a premium that equals the expected claim cost plus a loading of 20 % for expenses and profit. Calculate the annual premium (rounded to the nearest naira).
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About This Question
This is Gce Model Questions Vol1 2017 Commerce Question 47. It is one of the objective questions from the 2017 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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