An operational risk manager uses the Poisson distribution to estimate the frequency of losses in excess of USD 2 million during the next year. It is observed that the frequency of losses greater than USD 2 million is 3 per year on average over the last 10 years. If this observation is indicative of future occurrences and all the losses are independent of each other, what is the probability of at most one loss over USD 2 million occurring during the next two years?
An operational risk manager uses the Poisson distribution to estimate the frequency of losses in excess of USD 2 million during the next year. It is observed that the frequency of losses greater than USD 2 million is 3 per year on average over the last 10 years. If this observation is indicative of future occurrences and all the losses are independent of each other, what is the probability of at most one loss over USD 2 million occurring during the next two years? A.1.01%; B.1.40%; C.1.61%; D.1.74%