Question

SUBMIT THE LAB FOR GRADING Your insurance company has converged for three types of cars. The annual cost for each type of cars can be modeled using Gaussian (Normal) distribution, with the following parameters: (Discussions allowed) • Car type 1 Mean=$520 and Standard Deviation $110 • Car type 2 Mean=$720 and Standard Deviation $170 . Car type 3 Mean=$470 and Standard Deviation$80 Use Random number generator and simulate 1000 long columns, for each of the three cases. Example for the Car type 1, use Number of variables=1, Number of random numbers 1000, Distribution Normal, Mean 520 and Standard deviation 110, and leave random Seed empty Next: use either sorting to construct the appropriate histogram or rule of thumb to answer the questions: 13. What is approximate probability that Car Type 3 has annual cost less than $550? O a. Between 1% and 3% Ob. Between 27% and 39% Oc. Between 75% and 90% Od. None of these

Answer 1

Ans: -that ca Type 3 has annual Cost (esc than ssa PlCTsSSO)=P (2 x-) C=$80 S50-470 2 < P (CT3 <sso) 80 P P(CTs<so) 0.8413 Cfrom staudaid noomal datarbulfon table from -this OccLrence Waluo OurAnswes epon-c Belween 75 and 90%

14) 76 -ind hich of the thwce type s of cas 2. is most ftoly o Cost rse than 400 CAR TU1 PTCTI400) P (2(y-N S20 P 400 P (2<-1, 091) PLCTI400 0.1336 [fram 2-table PCCTIU0) O-1376 PCar Type 2 mean- 0 SD $40 P CCT2400) P2<MV 400-720 P (2< 170 P (2-1.8824) P(CT 400) 0.o2 Grom zloble)

ca Tupe-3 Mcan -f430 S.D $80 -N P(CT3 400) P(2 4O0-470 P(2 n-40) P (22-0.875 PCT3<40d) = 20.1908 Cfro -able) -frow all thes Answei, he currect Option s c Type 3 is mast likely have the Is ohich of -the three we pmo bability that t sill Cast highe pnobalrty $500 and $ t00 between Type 3 Option t' Answes