19. Battery Life The length of life (in days) of an alkaline battery has an exponential distribution with an average life of 1 year, so that 1 =1/365. What is the probability that an alkaline battery will fail before 180 days? а.

Q: Losses follow an exponential distribution with mean 1000. Insurance pays losses subject to a…

A: The aggregate stop-loss insurance is a policy designed to limit losses to a specific amount.…

Continuous Probability Distributions

Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.

Normal Distribution

Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!