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Distribution function

Controls

Claim model
0.70
01
2.0
0.55
Interval (a, b]
1.0
−19
4.0
−19
Inverse transform
0.65
01
F(x) = P(X ≤ x)
00.250.50.75102468claim size, €kP(1 < X ≤ 4) = F(4) − F(1)= 0.9594 − 0.8180 = 0.1414u = 0.65F⁻¹(0.65) = 0jump = P(X = 0) = 0.701,000 simulated claims, 720 of them exactly 0
P(1 < X ≤ 4)
0.1414
atom at 0
0.70
F⁻¹(0.65)
0 · inside the jump
E[X] = 0.30 × 2.0
0.60

About this tool

One increasing function, F(x) = P(X ≤ x), pins down the whole law of a random variable. The probability P(a < X ≤ b) is the rise of F between a and b, an atom is a jump, and a gap in the values is a flat stretch. Build a distribution here from atoms and a continuous part, then read probabilities straight off the curve. Reading F backwards turns a uniform draw into a draw of X, which is how simulations sample from a law. An insurance claim that is exactly 0 with probability 0.7 and otherwise a continuous amount is neither discrete nor continuous, yet F describes it without fuss.