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3. A loss (in tens of thousands of dollars) for an insurance company is a random...
1. The profit (in thousands of dollars) for a standard project handled by a water supply company is described by the fo...
1. The profit (in thousands of dollars) for a standard project handled by a water supply company is described by the following PDF: 0.02 0.01 0 -10 0 10 20 30 40 50 60 70 Profit, x (S 1000) (a) What is the probability that the company will lose money on a particular job? (b) Compute the probability that the profit exceeds $35,000
1. (3 POINTS) An insurance policy pays a individual $500 per day for up to 3...
1. (3 POINTS) An insurance policy pays a individual $500 per day for up to 3 days of hospitalization and $100 per day for each day of hospitalization thereafter. The number of days of hospitalization is a random variable X with P(X=x) = (6-x)/15, if x = 1,2,3,4,5. Calculate the expected payment for hospitalization under this policy. 2. (4 POINTS) An insurance policy reimburses a loss up to a benefit limit 0f $10. There is no deductible. The policyholder’s...
(5 marks) Consider an account of money that an insurance company has available to pay insurance...
(5 marks) Consider an account of money that an insurance company has available to pay insurance claims, where the balance changes continuously over time according to the following rules: .The balance increases continuously at a constant rate of $2,000/day as premiums are collected The balance drops when a claim is paid out, where claim amounts, X, are Exponentially distributed with a mean of $1,000. The time to wait until the next claim, Y, is Exponentially distributed with a mean of...
4. The number of claims per week at an Suppose that Y has probability mass function...
4. The number of claims per week at an Suppose that Y has probability mass function insurance company is a random variable Y Pr(v),0,1,2. py(y) 0, otherwise. The moment generating function (mgf) of Y is given by my(t)-c(1-e2)- for values of t<2. You do not need to prove this. (a) Show that c1-2 (b) What is the probability that there are at least 2 claims in a given week? (c) Find E(Y)
3) Consider a community with a very large number of agents. Each agent earns a random...
3) Consider a community with a very large number of agents. Each agent earns a random income, which take a value of $49, or a value of $1 with equal probabilities (1/2). Agents have concave utility function w/2, where w is an individual total income. Consider a community insurance scheme (TB), where agents with income $49 pays a tax T, and agents with income $1 receive a benefit B. If the community is required to balance the budget, so total...
Find the Total Income for a Continuous Stream Question A company models income, measured in thousands of dollars, using the continuous stream f(t) 2001 t ln(t)| for t > 0, where t is measured in y...
Find the Total Income for a Continuous Stream Question A company models income, measured in thousands of dollars, using the continuous stream f(t) 2001 t ln(t)| for t > 0, where t is measured in years. What is the total revenue generated in the first two years? Give your answer in thousands of dollars. When giving your answer, use numbers only. Do not include the dollar symbol, commas or anything to denote thousands in your answer. Hint: You may use...
An insurance company will insure a $50,000 diamond for its fullvalue against theft at a premium...
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...
A random sample of nine local banks show their deposits (in billions of dollars) 3 years...
A random sample of nine local banks show their deposits (in billions of dollars) 3 years ago and their deposits (in billions of dollars) today. At significance level of 0.05, can it be concluded that the average in deposits for the banks is greater today than it was 3 years ago? Use significance level of 0.05. Assume the variable is normally distributed. 3 years ago (Before): 11.42 8.41 3.98 7.37 2.28 1.10 1.00 0.9 1.35 Today (After): 16.69 9.44 6.53...
Suppose a life insurance company sells a $150,000 one-year term life insurance policy to a 19-year-old...
Suppose a life insurance company sells a $150,000 one-year term life insurance policy to a 19-year-old female for $220. The probability that the female survives the year is 0.999554, Compute and interpret the expected value of this policy to the insurance company The expected value is $ . (Round to two decimal places as needed.) Which of the following interpretation of the expected value is correct? O A. The insurance company expects to make an average profit of $153.10 on...
3. Ace Insurance Company has a Pro-Rata Surplus Share Treaty for all of their Tavern Owners...
3. Ace Insurance Company has a Pro-Rata Surplus Share Treaty for all of their Tavern Owners Policies. Each line is $50,00 and the treaty contains 12 lines, allowing Farm insurance Company the ability to write property limits of up to $600,00.(each line is $50,000). A: As the result of a bar fight, a motorcycle gang does $45,000 in damages to a tavern insured for $500,000. B: A tavern insured for $400,000. Is heavily damaged when a drunken driver smashes his...
1. The profit (in thousands of dollars) for a standard project handled by a water supply company is described by the following PDF: 0.02 0.01 0 -10 0 10 20 30 40 50 60 70 Profit, x (S 1000) (a) What is the probability that the company will lose money on a particular job? (b) Compute the probability that the profit exceeds $35,000
(5 marks) Consider an account of money that an insurance company has available to pay insurance claims, where the balance changes continuously over time according to the following rules: .The balance increases continuously at a constant rate of $2,000/day as premiums are collected The balance drops when a claim is paid out, where claim amounts, X, are Exponentially distributed with a mean of $1,000. The time to wait until the next claim, Y, is Exponentially distributed with a mean of...
4. The number of claims per week at an Suppose that Y has probability mass function insurance company is a random variable Y Pr(v),0,1,2. py(y) 0, otherwise. The moment generating function (mgf) of Y is given by my(t)-c(1-e2)- for values of t<2. You do not need to prove this. (a) Show that c1-2 (b) What is the probability that there are at least 2 claims in a given week? (c) Find E(Y)
3) Consider a community with a very large number of agents. Each agent earns a random income, which take a value of $49, or a value of $1 with equal probabilities (1/2). Agents have concave utility function w/2, where w is an individual total income. Consider a community insurance scheme (TB), where agents with income $49 pays a tax T, and agents with income $1 receive a benefit B. If the community is required to balance the budget, so total...
Find the Total Income for a Continuous Stream Question A company models income, measured in thousands of dollars, using the continuous stream f(t) 2001 t ln(t)| for t > 0, where t is measured in years. What is the total revenue generated in the first two years? Give your answer in thousands of dollars. When giving your answer, use numbers only. Do not include the dollar symbol, commas or anything to denote thousands in your answer. Hint: You may use...
Suppose a life insurance company sells a $150,000 one-year term life insurance policy to a 19-year-old female for $220. The probability that the female survives the year is 0.999554, Compute and interpret the expected value of this policy to the insurance company The expected value is $ . (Round to two decimal places as needed.) Which of the following interpretation of the expected value is correct? O A. The insurance company expects to make an average profit of $153.10 on...
3. Ace Insurance Company has a Pro-Rata Surplus Share Treaty for all of their Tavern Owners Policies. Each line is $50,00 and the treaty contains 12 lines, allowing Farm insurance Company the ability to write property limits of up to $600,00.(each line is $50,000). A: As the result of a bar fight, a motorcycle gang does $45,000 in damages to a tavern insured for $500,000. B: A tavern insured for $400,000. Is heavily damaged when a drunken driver smashes his...
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