A farmer has found that in a typical year they earn $75000 from their harvest. In a wet year, they earn $48000, and in a drought, they earn $26000. If the probability of a wet year is 0.30 and the probability of drought is 0.20 find the mean amount this farmer will make from their harvest over a long period of years. If the farmer has the option of buying insurance for $2000 a year that pays $20000 in a year of drought, does it make sense financially to buy the insurance?
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 farmer has found that in a typical year they earn $75000 from their harvest. In a wet year, they earn $48000, and in a drought, they earn $26000. If the
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