Mutual Property Insurance Company Has a Surplus of $2 Million

question 31

Multiple Choice

Mutual Property Insurance Company has a surplus of $2 million.According to a conservative rule,how much in new net premiums can Mutual Property Insurance Company safely write?

• A)$2 million
• B)$8 million
• C)$10 million
• D)$20 million

---

Definitions:

Probability Z

A measure used in statistics that describes the number of standard deviations a data point is from the mean in a normal distribution.

Continuous Random Variable

A type of random variable that can take an infinite number of values within a given range.

Snow

Precipitation in the form of ice crystals that falls from clouds when air temperatures are below freezing.

Density Curve

A graphical representation of a probability distribution, where the total area under the curve equals 1.