Suppose Go Green Insurance Company insures 25 risks, each with a 4% probability of loss. The...
Suppose Go Green Insurance Company insures 25 risks, each with a 4% probability of loss. The
probabilities of loss are independent. On average, how often would 4 or more risks have losses in
the same year?
(a) Once in 13 years
(b) Once in 17 years
(c) Once in 39 years
(d) Once in 60 years
(e) Once in 72 years
Homework Answers
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Suppose Go Green Insurance Company insures 25 risks, each with a
4% probability of loss. The...
Insurance companies know the risk of insurance is greatly reduced if the company insures not just...
Insurance companies know the risk of insurance is greatly reduced if the company insures not just one person, but many people. How does this work? Let x be a random variable representing the expectation of life in years for a 25-year-old male (i.e., number of years until death). Then the mean and standard deviation of x are μ = 49.0 years and σ = 10.3 years (Vital Statistics Section of the Statistical Abstract of the United States, 116th Edition). Suppose...
Insurance companies know the risk of insurance is greatly reduced if the company insures not just...
Insurance companies know the risk of insurance is greatly reduced if the company insures not just one person, but many people. How does this work? Let x be a random variable representing the expectation of life in years for a 25-year-old male (i.e., number of years until death). Then the mean and standard deviation of x are μ = 49.3 years and σ = 11.1 years (Vital Statistics Section of the Statistical Abstract of the United States, 116th Edition). Suppose...
Suppose that an insurance company insures more than one million individuals with a policy that the...
Suppose that an insurance company insures more than one million individuals with a policy that the company actuaries eve will net them an average profit of $20 per month per policy (total premiums collected minus payouts for claims and overhead, divided by the number of such policies that they carry). Assume that total dollar amount of claims each month varies randomly the statements do not accurately reflect the meaning of the law of large numbers. As more months go by,...
Make a code in R 3. A small insurance company insures a modest number of people...
Make a code in R
3. A small insurance company insures a modest number of people and the number X who will file 3. Find the following a claim in any given year follows a Poisson distribution with mean probabilities: (a) Exactly one person files a clain. (b) At least one person files a claim. (c) More than 4 people file a claim. (d) More than 2 and less than 10 will file a claim. (e) Suppose instead we know...
7. Suppose that an insurance company classifies people into one of three classes: good risks, average...
7. Suppose that an insurance company classifies people into one of three classes: good risks, average risks, and bad risks. The company's records indicate that the probabilities that good-, average-, and bad-risk persons will be involved in an accident over a 1-year span are, respectively, .05, .15, and .30. If 20 percent of the population is a good risk, 50 percent an average risk, and 30 percent & bad risk, determine the following: (a) the probability that a randomly selected...
(c) If you buy 4 spark plugs, what is the probability that at least one is...
(c) If you buy 4 spark plugs, what is the probability that at least one is defective? 5. At Least One Girl: Suppose a couple plans to have 4 children and the probability of a boy is 0.50. Find the probability that the couple has at least one girl. 6.* Lie Detector: Suppose a lie detector test can detect a lie 95% of the time. You get hooked up and tell 10 truths and 10 lies. What is the probability...
1 Jones Company recognized a casualty loss due to a fire in its warehouse 5 Jones...
1 Jones Company recognized a casualty loss due to a fire in its warehouse 5 Jones Company recognized an unrealized holding gain on the sale of trading securities 2 Jones Company sold its vegan products division at a loss during 2021 1. Unusual and Infrequent Gains and Losses 2. Discontinued Operations 3 3. Change in Accounting Principle Jones Company changed its method of recording depreciation from a method created by the CFO to the straight line method. 4. Change in...
A stadent asked Dr. Dars birthday at randomly. Find the probability that Dr. D APRIL (Ignore...
A stadent asked Dr. Dars birthday at randomly. Find the probability that Dr. D APRIL (Ignore leap years) Dr. Dai's birthday is in APRIL) A) 30/365 (1) 31/365 i visin 30 C) 1/12 D) 28/365 32) Roll a pair of dice la red, a green). What is the probability that their face numbers are same! A) 7/36 B) 5/36 C) 1/6 DJ 5/6 Problems 33 through 38, given same information in Problem 35 33) Given X (37 44 18 53...
1. Suppose that random variables X and Y are independent and have the following properties: E(X)...
1. Suppose that random variables X and Y are independent and have the following properties: E(X) = 5, Var(X) = 2, E(Y ) = −2, E(Y 2) = 7. Compute the following. (a) E(X + Y ). (b) Var(2X − 3Y ) (c) E(X2 + 5) (d) The standard deviation of Y . 2. Consider the following data set: �x = {90, 88, 93, 87, 85, 95, 92} (a) Compute x¯. (b) Compute the standard deviation of this set. 3....
Assignment Brief You have been appointed as a business analyst at Carlson Department Store. Your first project is to provide an analysis for an insurance claim for the company’s loss of sales for quar...
Assignment Brief
You have been appointed as a business analyst at Carlson Department
Store. Your first project is to provide an analysis for an
insurance claim for the company’s loss of sales for quarter 4 of
last year due to a hurricane last summer. In your analysis, you are
to make appropriate recommendations in relation to sales the
company would have had.
A. Background
The Carlson Department Store suffered heavy damage after a
hurricane struck late last summer. The store...
Suppose that an insurance company insures more than one million individuals with a policy that the company actuaries eve will net them an average profit of $20 per month per policy (total premiums collected minus payouts for claims and overhead, divided by the number of such policies that they carry). Assume that total dollar amount of claims each month varies randomly the statements do not accurately reflect the meaning of the law of large numbers. As more months go by,...
Make a code in R
3. A small insurance company insures a modest number of people and the number X who will file 3. Find the following a claim in any given year follows a Poisson distribution with mean probabilities: (a) Exactly one person files a clain. (b) At least one person files a claim. (c) More than 4 people file a claim. (d) More than 2 and less than 10 will file a claim. (e) Suppose instead we know...
7. Suppose that an insurance company classifies people into one of three classes: good risks, average risks, and bad risks. The company's records indicate that the probabilities that good-, average-, and bad-risk persons will be involved in an accident over a 1-year span are, respectively, .05, .15, and .30. If 20 percent of the population is a good risk, 50 percent an average risk, and 30 percent & bad risk, determine the following: (a) the probability that a randomly selected...
(c) If you buy 4 spark plugs, what is the probability that at least one is defective? 5. At Least One Girl: Suppose a couple plans to have 4 children and the probability of a boy is 0.50. Find the probability that the couple has at least one girl. 6.* Lie Detector: Suppose a lie detector test can detect a lie 95% of the time. You get hooked up and tell 10 truths and 10 lies. What is the probability...
1 Jones Company recognized a casualty loss due to a fire in its warehouse 5 Jones Company recognized an unrealized holding gain on the sale of trading securities 2 Jones Company sold its vegan products division at a loss during 2021 1. Unusual and Infrequent Gains and Losses 2. Discontinued Operations 3 3. Change in Accounting Principle Jones Company changed its method of recording depreciation from a method created by the CFO to the straight line method. 4. Change in...
A stadent asked Dr. Dars birthday at randomly. Find the probability that Dr. D APRIL (Ignore leap years) Dr. Dai's birthday is in APRIL) A) 30/365 (1) 31/365 i visin 30 C) 1/12 D) 28/365 32) Roll a pair of dice la red, a green). What is the probability that their face numbers are same! A) 7/36 B) 5/36 C) 1/6 DJ 5/6 Problems 33 through 38, given same information in Problem 35 33) Given X (37 44 18 53...
Assignment Brief
You have been appointed as a business analyst at Carlson Department
Store. Your first project is to provide an analysis for an
insurance claim for the company’s loss of sales for quarter 4 of
last year due to a hurricane last summer. In your analysis, you are
to make appropriate recommendations in relation to sales the
company would have had.
A. Background
The Carlson Department Store suffered heavy damage after a
hurricane struck late last summer. The store...
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