8. Assume that an insurance company knows the following probabilities relating to automobileaccidents (where the second column refers to the probability that the policyholder has at leastone accident during the annual policy period):Age of Driver16 - 2526 - 5051 - 6566 - 90Probability of Accident0.050.020.030.04Fraction of Company'sInsured Drivers0.100.550.200.15A randomly selected driver from the company's insured drivers has an accident. What is theconditional probability that the driver is in the 16-25 age group?

Age of driver probability of accidentFraction of company 's Insured Drivers…

Answered: 8. Assume that an insurance company…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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You are working as a portfolio manager for an Asset Management firm. The following table provides the annual returns expected under various market conditions or regime. Each regime has the probability given in the table (i.e. P(Pandemic) = 0.05 and P(Recession) = 0.20, and so on)...Please answer the following questions from the data in the table:
23. Precipitation In Akron, Ohio, the mean number of days in April with 0.01 inch or more of precipitation is 14. Find the probability that the number of days in April with 0.01 inch or more of precipitation in Akron is (a) exactly 17 days, (b) at most 17 days, and (c) more than 17 days.
3. A recent article in the Journal of Urban Chicken Farmers reported the fraction of chickens that experience severe, moderate, or minor side effects from a new diet are 0.07, 0.15, and 0.78, respectively. Assuming that chickens respond independently, if 18 chickens were tested on the new diet, what is the Probability that 2, 4, and 12 chickens will suffer severe, moderate, or minor side effects, respectively? Probability that no chickens will suffer severe side effects? Mean number of chickens that will suffer severe side effects? Variance in the number of chickens that will suffer severe side effects? Conditional mean of the number of chickens that suffer severe side effects given that 17 suffer minor side effects. a. b. C. d. e.
11. Find the probability of the indicated event if P(E) = 0.20 and P(F)= 0.35. Find P(E and F) if P(E or F)= 0.30 P(E and F) = (Simplify your answer.)
2. Statistical measures of stand-alone risk Remember, the expected value of a probability distribution is a statistical measure of the average (mean) value expected to occur during a possible circumstances. To compute an asset's expected return under a range of possible circumstances (or states of nature), multiply the anticipated return expected to result during each state of nature by its probability of occurrence. Consider the following case: Ethan owns a two-stock portfolio that invests in Happy Dog Soap Company (HDS) and Black Sheep Broadcasting (BSB). Three- quarters of Ethan's portfolio value consists of HDS's shares, and the balance consists of BSB's shares. Each stock's expected return for the next year will depend on forecasted market conditions. The expected returns from the stocks in different market conditions are detailed in the following table: Market Condition Probability of Occurrence Happy Dog Soap Black Sheep Broadcasting Strong 0.50 50% 70% Normal 0.25 30% 40% Weak…
19. The chance for precipitation (rain) in Washington, DC this weekend is about 40% everyday. (a) What is the probability that it will rain on Friday, Saturday, and Sunday? (b) What is the probability that there won't be any rain day this entire weekend.
5. An attendant of a car wash is paid according to the number of cars that pass through. Suppose the probability are 1/12, 1/12, 1/4, 1/4, 1/6, and 1/6 respectively, that the attendant receives $7, $9, $11, $13, $15 and $17 between 4:00 PM and 5:00 PM on any sunny Friday. Find the attendant's expected earnings for this particular period.
2. If an insurance company issues a $200,000 five-year policy on a man whose probability of living for another five years is .994, what is the minimum that the expected cost to the company for this policy?

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