A tree cutting business has an insurance policy to cover any damages caused during the tree cutting process. The business pays an annual premium of $1,500 for a policy that covers up to $500,000 in damages. The probability of a tree causing damage is 0.002. What is the expected value? The expected value is That means the tree cutting company can expect to on average, per year. Mathematically, would this be considered a "fair" deal between the insurance company and the tree-cutting business?

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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.