8 An insurance company wants to model a random variable X It

8. An insurance company wants to model a random variable X. It believes that for large values, it should use a Pareto distribution with alpha = 4 and theta = 300 to model the distribution of values above 5000. For values below 5000, it plans to use an inverse gamma distribution with alpha = 3 and theta = 800. 1f 5% of values are above 5000, what is the probability under this model that the value of X is between 3000 and 10000?

Solution

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