[R] A coding question involving variable assignments in ifelse()

xpRt.wannabe xprt.wannabe at gmail.com
Thu Apr 26 18:48:52 CEST 2007

Dear List,

Below is a simple, standard loss model that takes into account the
terms of an insurance policy:

deductible <- 15
coverage.limit <- 75
insurance.threshold <- deductible + coverage.limit

tmpf <- function() {
loss <- rlnorm(rpois(1, 3), 2, 5)
sum(ifelse(loss > insurance.threshold, loss - coverage.limit,
pmin(loss, deductible)))
net <- replicate(1000000, tmpf())

Now, I would like to enhance the model by incorporating the following
two probabilities:

1. Probability of claim being accepted by the insurance company, say, 0.8
2. Probability of payout by the insurance company, say, 0.999

Could anyone suggest how one might do this?

platform i386-pc-mingw32
arch     i386
os       mingw32
system   i386, mingw32
major    2
minor    2.1
year     2005
month    12
day      20
svn rev  36812
language R


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