Question

2) [2096] Penguin auto insurance estimates that there exists a .23 probability that 16-year-old driving a red, two-door, 8-cylinder engine car will get into an accident that would cost the maximum amount in liability of $100,000. The annual premium for such a policy is $2,500. Q1) What is the expected profit per year for Penguin on such a policy? Q2) What profit must Penguin charge in order to make a profit on each policy? 3.120%) Recent research at Viking auto parts reflects that there is a 29% chance that a customer walking into the store will make a purchase. Q1) Determine the sample space. Q2) What is the probability that exactly two of the next four customers will make a purchase?

Answer 1

Solution:-

3)

Q1) The sample space is total number of costumers walking into store.

The sample space is a collection of all possible outcomes of the experiment.

In this case sample space is total number of costumers walking into store.

Q2) The probability that exactly two of the next four costumers will make a purchase is 0.2544.

p = 0.29, n = 4

x = 2

By applying binomial distribution

P(x,n) = ⁿC_x*p^x*(1-p)^(n-x)

P(x = 2) = 0.2544