Insurance. The annual premium for a $15,000 insurance policy against the theft of a painting is...
The annual premium for a $5,000 insurance policy against the theft of a painting is $200. If the (empirical) probability that the painting will be stolen during the year is 0.02, what is your expected return from the insurance company if you take out this insurance? Let X be the random variable for the amount of money received from the insurance company in the given year. Edollars
An insurance company will insure a $50,000 diamond for its fullvalue against theft at a premium of $400 per year. Suppose that theprobability that the diamond will be stolen is .005, and let xdenote the insurance company’s profit. a) What is the name of this distribution? Circle the correctanswer. A) Discrete Distribution. B) Sampling Distribution about theMean C) Normal Distribution D) Binomial Distribution b) Set up the probability distribution of the random variable x intabular form. c) Calculate the insurance...
An insurance company will insure a $50,000 diamond for its full value against theft at a premium of $400 per year. Suppose that the probability that the diamond will be stolen is .005, and let x denote the insurance company's profit. a) Set up the probability distribution of the random variable x. b) Calculate the insurance company's expected profit. c) Find the premium that the insurance company should charge if it wants its expected profit to be $1,000.
An insurance company would like to offer theft insurance for renters. The policy would pay the full replacement value of any items that were stolen from the apartment. Some apartments have security alarms installed. Such systems detect a break-in and ring an alarm within the apartment. The insurance company estimates that the probability of a theft in a year is 0.05 if there is no security system and 0.01 if there is a security system (there cannot be more than...
Suppose you are interested in insuring a car stereo for $600 against theft. An insurance company charges a premium of $80 for coverage for 1 year, claiming an empirically determined probability of 0.8 that the stereo system will be stolen some time during the year. (a) What is the insurance company's expected profit? (b) What is your expected return from the insurance company if you take out this insurance?
Insurance, Inc., a nonlife insurance company, insures customer properties, including jewelries. The company will insure a $50,000 diamond for its full value against theft at an annual premium of $400. Suppose that the probability that the diamond would be stolen is 0.005, and let xdenote the insurance company’s profit. Set up the probability distribution of the random variable x. Calculate the insurance company’s expected profit. Find the premium that the insurance company should charge if it wants its expected profit...
National Insurance Company collected a premium of $15,000 for a 1-year insurance policy on May 1. What amount should National Insurance Company report as a current liability for Unearned Insurance Revenue at December 31? Select one: a. $5,000. O b. $0. O c. $15,000. O d. $10,000
National Insurance Company collected a premium of $15,000 for a 1-year insurance policy on May 1. What amount should National Insurance Company report as a current liability for Unearned Insurance Revenue at December 31? Select one: a. $5,000. O b. $0. O c. $15,000. O d. $10,000
13. An insurance company sets a premium of a $5 term Insurance Policy of $1000 a 45-year old man will die during the next year is 0.0036. The probablitn distribution of the random variable X that denotes the gain to the insurance company is: for selling a l-year to a man of age 45. The probability that Random variable X $5 Probabili $5 $1000 0.0036 0.9964 6s a) What is the Expected Value (mean) or? b) If the company sells...
A company is considering two insurance plans with coverage and premiums shown in the table. (For example, this means that $50 buys one unit of plan A, consisting of $10,000 fire and theft insurance and S180,000 of liability insurance.) Answer parts a and b Policy A $10,000 Policy B $15,000 Liability S180,000 $120,000 $50 $40 a. The company needs at least $450,000 fire and theft insurance and at least $5,400,000 liability from these plans. How many units should be purchased...