A disability insurance policy is sold to an individual earning $60,000 per year. The probability of partial disability follows a uniform distribution over the interval [0, 60,000]. The policy only pays if the loss is greater than 20% of the salary.What is the standard deviation of the payout?

Answered: A disability insurance policy is sold…

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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A disability insurance policy is sold to an individual earning $60,000 per year. The probability of partial disability follows a uniform distribution over the interval [0, 60,000]. The policy only pays if the loss is greater than 20% of the salary. What is the standard deviation of the payout?