Write down the probability distribution of x

Assignment Help Basic Statistics
Reference no: EM13325181

Suppose you work for an insurance company, and you sell an $120,000 fire insurance policy at
an annual premium of $1250. Experience has shown that:

The probability of total loss (due to fire) to a house in that area and of the size of your customer's house is .001 (in which case the insurance company will pay the full $120,000 to your customer).

The probability of 50% damage (due to fire) to a house in that area and of the size of your customer's house is .003 (in which case the insurance company will pay only $60,000 to
your customer).
(For simplicity, we ignore any other partial losses.)
(a) Write down the probability distribution of X, the insurance company's annual gain from such a policy (i.e., the amount of money made by the insurance company from such a policy).
(b) What is the mean (expected) annual gain for a policy of this type?
(c) What should be the annual premium (instead of $1250) if the company wants to increase the expected gain from a policy of this type by 10%?

Reference no: EM13325181

Questions Cloud

Explain what fe2 concentration will fe(oh)2 precipitate : Above what Fe2 concentration will Fe(OH)2 precipitate from a buffer solution that has a pH of 9.39? The Ksp of Fe(OH)2 is 4.87×10-17
Define what is the concentration of ni2 ions : A 0.160-mole quantity of NiCl2 is added to a liter of 1.20 M NH3 solution. What is the concentration of Ni2 ions at equilibrium? Assume the formation constant* of Ni(NH3)62 is 5.5 × 108.
Identify various considerations involved in planning : Further, these systems are also accessed using mobile computers such as the iPads. The CEO would like to develop a complete set of hardware, telecommunication and Human Resource Infrastructure for the purpose of developing the HIS planned in Journ..
Define the ionization constant for hclo : Calculate the pH for each of the following cases in the titration of 50.0 mL of 0.100 M HClO(aq) with 0.100 M KOH(aq). The ionization constant for HClO can be found here.
Write down the probability distribution of x : Write down the probability distribution of X, the insurance company's annual gain from such a policy (i.e., the amount of money made by the insurance company from such a policy).
The next woman he meets will have such a height : Height X of adult women are normally distributed with mean 63.7 inches and standard deviation 2.71 iches. Romeo who is 68.25 inches tall wishes to date only women who are shorter than he but within 4 inches of his height. Find the probability ..
Integrating technology and digital media in the classroom : I recently rented the 4th edition of "Integrating Technology and Digital Media in the Classroom" published by Thomson Course Technology for a web-based course that I am auditing. Now I find that I need an "access code" to access some of the on-line c..
Sociological perspectives to explain a social phenomenon : Write a two-page paper explaining how you would apply the sociological perspectives to explain a social phenomenon. You can get a better idea about how to complete this assignment by looking at the area called, "Applying the Sociological Persp..
Economic fluctuations are fluctuations in level of economic : Economic fluctuations (or business cycles) are fluctuations in the level of economic activity, relative to a long-term growth trend.

Reviews

Write a Review

Basic Statistics Questions & Answers

  Differentiate sample t-test and anova hypothesis testing

In ANOVA, what does F=1 mean? What are the differences between a two sample t-test and ANOVA hypothesis testing? When would you use ANOVA at your place of employment, in your education, or in politics?

  Find probability that all three ignition systems are good

Find the probability that all 3 ignition systems are good.d- which is better: the answer from part (b) or the answer from part (c)? why?

  Difference in total call times

Our customers expect a call to be completed in 22 minutes. Using the data above, does either of our call centers meet this expectation with an alpha level of 0.05?

  Solving an equation using quadratic formula

Solve using the quadratic formula: Radicands must be enclosed within

  Normal distribution to approximate the probability

Use the normal distribution to approximate the following probability: According to the most recent Davenport student profile, 47% of students have children under 17 living at home with them.

  How to test the claim that true mean of process is different

Sample is found to have a mean of 80.6,a standard deviation of 1.4 test the claim that the true mean of this process is different than 80. use 10% level of significance.

  Conclude that verbal praise lower performance levels

Should we thus conclude that verbal praise tends to lower performance levels, whereas verbal criticism tends to raise them? Or is some other explanation possible?

  How many network servers need reliability

How many independent network servers would be needed if each has 99 percent reliability? (b) If each has 90 percent reliability?

  Hypothesis test-fitness camp glasses

Researchers at the Cornell University Food and Brand Lab conducted an experiment at a fitness camp for adolescents (Wansink & van Ittersum, 2003).

  Find percentage of battery with life time of at least hours

Find (i) the percentage of batteries with a life time of at least 470 hours (ii) the proportion of batteries with life time between 385 and 415 hours. (iii) the minimum life of the best 5% of batteries.

  Collectively exhaustive event

If two events are collectively exhaustive, what is the probability that both occur at the same time?

  Probability that a male is a major or a colonel

Dertermine the probability that a male is a Major or a Colonel?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd