A company prices its tornado insurance using the following assumptions: • In any calendar year, there can be at most one tornado. • In any calendar year, the probability of a tornado is 0.02. • The number of tornadoes in any calendar year is independent of the number of tornados in any other calendar year. Using the company's assumptions, calculate the probability that there are fewer than 2 tornadoes in a 16-year period
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.
A company prices its tornado insurance using the following assumptions:
• In any calendar year, there can be at most one tornado.
• In any calendar year, the probability of a tornado is 0.02.
• The number of tornadoes in any calendar year is independent of the number of tornados in any other calendar year.
Using the company's assumptions, calculate the probability that there are fewer than 2 tornadoes in a 16-year period
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
