17. *A company buys a policy to insure its revenue in the event of major snowstorms that shut down business. The policy pays nothing for the first such snowstorm of the year and 10,000 for each one thereafter, until the end of the year. The number of major snowstorms per year that shut down business is assumed to have a Poisson distribution with mean 1.5. What is the expected amount paid to the company under this policy during a one-year period? (7,231)

17. *A company buys a policy to insure its revenue in the event of major snowstorms that shut down business. The policy pays nothing for the first such snowstorm of the year and 10,000 for each one thereafter, until the end of the year. The number of major snowstorms per year that shut down business is assumed to have a Poisson distribution with mean 1.5. What is the expected amount paid to the company under this policy during a one-year period? (7,231)

Name: 17. *A company buys a policy to insure its revenue in the event of ma
Uploaded: 2024-03-20T07:06:41.000Z
Channel: Bartleby
Description: 17. *A company buys a policy to insure its revenue in the event of majorsnowstorms that shut down business. The policy pays nothing for thefirst such snowstorm of the year and 10,000 for each one thereafter,until the end of the year. The number of m

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Related questions

Q: Suppose a quarterback’s completion percentage for the season is 67.2%. Based on relative frequency,…

A: 67.2% time quarterback complete a pass. So, the probability that quarterback will complete a pass =…

Q: What might be a set of numbers we expect to be normally distributed?

A: Introduction: A normally distributed random variable has a symmetric, bell-shaped distribution,…

Q: During tax season, the IRS hires seasonal workers to help answer the questions of taxpayers who call…

A: where arrivals follow a Poisson distribution, service times follow an exponential distribution, and…

Q: Suppose a quarterback's completion percentage for the season is 67.2%. Based on relative frequency,…

A: We have to find Based on relative frequency, is it more likely that he will complete his next two…

Q: A certain brokerage house wants to estimate the mean daily return on a certain stock. A random…

Q: The number of industrial injuries per working week in a particular factory is known to follow a…

A: Given that Mean =λ=0.5 X~poisson (λ) Where λ ia a parameter.

Q: A certain brokerage house wants to estimate the mean daily return on a certain stock. A random…

Q: Workers in a factory have to take their work to the quality control department before the product…

A: There are large number of employees and arrivals are approximately 20 per hour (Poisson process…

Q: The Capital Asset Pricing Model (CAPM) is a financial model that assumes returns on a portfolio are…

A: Given that. X~N( μ , ?) μ=14.7 , ?=33 Z-score =( x - μ )/?

Q: 2. A prison reports that the number of escape attempts per month has a Poisson distribution with a…

A: Given, A prison reports that the number of escape attempts per month has a Poisson distribution with…

Q: A saloon has three barbers to handle customers. At the present time, customers arrive at an average…

A: Introduction: Suppose λ is the rate of arrival of the of customers in the saloon. It is given that…

Q: Suppose the number of babies born during an 8-hour shift at a hospital's maternity wing follows a…

A: Given, lamda=6 P(X=5)=?

Q: Suppose the value of a stock varies each day from $12 to $27 with a uniform distribution. Find σ

Q: What formula is used to gain information about an individual data value when the variable is…

A: Solution: 6. Let X be the random variable. From the given information, X is normally distributed.

Q: The number of typographical errors in a document follows a Poisson distribution with a mean of 3…

A: Solution: Let X be the number of errors on 2 pages. From the given information, the number of…

Q: d) What is the probability that there will be at least 2 accidents during the next two weeks? e)…

Q: A cafeteria serving line has a coffee urn from which customers serve themselves. Arrivals at the urn…

A: "Since you have posted a question with multiple subparts we will provide solutions only to the first…

Q: Suppose the returns of a particular group of mutual funds are normally distributed with a mean of…

A: μ = 12.4 σ = 4.7 Manager wants his fund to be in top 5% = 0.05

Q: In a certain communications system, there is an average of 1 transmission error per 10 seconds.…

A: It is given that there are 1 transmission error per 10 seconds. Therefore, there are 3 transmission…

Q: 2. For a liability coverage: (i) Losses per insured follow an exponential distribution with mean .…

Q: Suppose the number X of tornadoes observed in Kansas has a Poisson distribution with λ = Find the…

A: Python Code: import math from scipy.stats import poisson # Given lambda for the Poisson…

Q: 5. Here's an example where the Poisson distribution was used in a maternity hospital to work out how…

A: 1)

Q: Suppose that the annual rate of return for a common biotechnology stock is normally distributed with…

A: Given Mean=4.5 Standard deviations 4

Q: What is the definition of a covariance stationary process? Why is stationarity such as important…

A: Given problem Given that

Q: The arrival rate of cars at PC jewelers is 20 cars per hour. The service rate at PC jeweler shop is…

A: At PC jewelers shop,The arrival rate of cars per hourThe service rate of cars per hourThe…

Q: Suppose that a market research analyst for a cell phone company conducts a study of their customers…

A: It is given that the mean is 30.

Q: Suppose losses follow a uniform distribution from 0 to 30,000. If there is a deductible of 3000, and…

A: Given Losses follow a uniform distribution from 0 to 30000.Let X be loss ~Uniform(0,30000) The…

Concept explainers

Contingency Table

A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.

Binomial Distribution

Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.

Topic Video

Question

100%

17. *A company buys a policy to insure its revenue in the event of major
snowstorms that shut down business. The policy pays nothing for the
first such snowstorm of the year and 10,000 for each one thereafter,
until the end of the year. The number of major snowstorms per year
that shut down business is assumed to have a Poisson distribution with
mean 1.5.
What is the expected amount paid to the company under this policy
during a one-year period? (7,231)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

$Discrete Probability Distributions$

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, probability and related others by exploring similar questions and additional content below.

Similar questions

6. Consider a coffee shop that uses a single-server queue. The inter-arrival time is exponentially distributed with a mean of 10 minutes and the service time is also exponentially distributed with a mean of 8 minutes. Calculate the: (i) mean wait in the queue (2) (ii) mean number in the queue (2) (iii) the mean wait in the system (2) (iv) mean number in the system (2) (v) proportion of time the server is idle. (2) [10] 7. The arrival of customers at a bank follows a Poisson distribution with a mean arrival rate of 10 customers per hour. The service time at the bank follows an exponential distribution with a mean service rate of 6 minutes per customer. Calculate the average number of customers in the system (including those being served and waiting) and the average time a customer spends in the system. How is the system performing? [8]
5.6. The Peachtree Airport in Atlanta serves light aircraft. It has a single runway and one air traffic controller to land planes. It takes an airplane 8 minutes to land and clear the runway (exponentially distributed). Planes arrive at the airport at the rate of 5 per hour (Poisson distributed). a. Determine the average number of planes that will stack up waiting to land. b. Find the average time a plane must wait in line before it can land. c. Calculate the average time it takes a plane to clear the runway once it has notified the airport that it is in the vicinity and wants to land. d. The FAA has a rule that an air traffic controller can, on the average, land planes a maximum of 45 minutes out of every hour.
Officer Thompson of the Bay Ridge Police Department works the graveyard shift. He averages 4.5calls per shift from this dispatcher. Assume the number of calls follows a Poisson distribution. Find theprobability that Officer Thompson get fewer than 2 calls in a shift.
True or False: The number of customers arriving at a department store in a five-minute period has a Poisson distribution.
The Johnson & Johnson Company operates 6 identical machines that are serviced by a single technician when they breakdown. These breakdowns occur according to the Poisson distribution and average 0.03 breakdowns per machine operating hour. Average repair time for a machine is 5 hours and follows the exponential distribution. a) What percent of the technician's time is spent repairing machines? Answer in 4 decimal places. Blank 1 b) On average, how long is a machine out of service because of a breakdown? Answer in 2 decimal places. Blank 2 c) On average, how many machines are out of service? Answer in 1 decimal place. Blank 3 Blank 1 Blank 2 Blank 3 Add your answer Add your answer Add your answer