Two kinds of claims


There are two kinds of claims that are made to an insurance company. Let Ni(t) denote the number of type i claims made by time t, and assume that {N1(t), t > 0} and {N2(t),t > 0} are independent Poisson processes with rates ?1 = 10 and ?2 = 1. The amounts of successive kind 1 claims are independent exponential random variables with mean $1000 whereas the amounts from type 2 claims are independent exponential random variables with mean $5000. A claim for $4000 has just been received; what is the probability it is a type 1 claim?

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Basic Statistics: Two kinds of claims
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