What is the most likely value of primary loss events per year given the following data: Minimum: 0.1, Average: 0.25, Mode: 0.2, Maximum: 0.5?

To determine the most likely value of primary loss events per year, we can analyze the provided statistical values: minimum (0.1), average (0.25), mode (0.2), and maximum (0.5).

The average (0.25) suggests that, on a yearly basis, we would expect about a quarter or 25% of a loss event. When translated into an annual frequency, this equates to an expected occurrence of approximately 25 loss events over 100 years, which corresponds directly to a rate of 0.25 losses per year. This value aligns well with the mode (0.2), which indicates that most incidents would cluster around this frequency.

Answer D states that primary losses would occur 10 times in 50 years. This can be simplified to an average of 0.2 losses per year (10 losses / 50 years), which is closely aligned with the mode and below the average but not below the minimum threshold. This suggests that while it may not be the exact average, it falls within a reasonable estimation based on the provided data.

Overall, the reasoning behind choosing this option arises from the understanding that the average value provides a foundational expectation for loss events and D’s value