You are given the following information about a group of policies:
(i) The ith claim amount is denoted by. Claim amounts can be 100, 200, or 400.
(ii) The claim amount is dependent on the value of a risk parameter.
(iii) is a random variable that takes the value with probability 0.25, with probability 0.2, value with probability 0.2, ” with probability 0.1, value # with probability 0.2 and $ with probability 0.05.
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