1. An insurance policy reimburses a loss up to a benefit limit of 5. The policyholder's loss, Y, follows a distribution with density function f (y) = 2/y³ if y > 1 and 0 otherwise. What is the probability that the payment is 5?

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Chapter1: Combinatorial Analysis
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1. An insurance policy reimburses a loss up to a benefit limit of 5. The policyholder's loss, Y,
follows a distribution with density function f((y) = 2/y³ if y > 1 and 0 otherwise. What is
the probability that the payment is 5?
2. A recent study indicates that the annual cost of maintaining and repairing a car in New
Orleans averages 400 with standard deviation of 15. Ifa tax of 10% is introduced on all
items associated with the maintenance and repair of cars (i.e., everything is made 10%
more expensive), what will be the variance of the annual cost of maintaining and repairing
a car?
Transcribed Image Text:1. An insurance policy reimburses a loss up to a benefit limit of 5. The policyholder's loss, Y, follows a distribution with density function f((y) = 2/y³ if y > 1 and 0 otherwise. What is the probability that the payment is 5? 2. A recent study indicates that the annual cost of maintaining and repairing a car in New Orleans averages 400 with standard deviation of 15. Ifa tax of 10% is introduced on all items associated with the maintenance and repair of cars (i.e., everything is made 10% more expensive), what will be the variance of the annual cost of maintaining and repairing a car?
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