An automobile insurance company divides customers into three categories, good risks, medium risks, and poor risks. Assume that 61% of the customers are good risks, 29% are medium risks, and 10% are poor risks. Assume that during the course of a year, a good risk customer has probability 0.005 of filing an accident claim, a medium risk customer has probability 0.014, and a poor risk customer has probability 0.026. A customer is chosen at random. (a) What is the probability that the customer is a good risk and has filed a claim? (b) What is the probability that the customer has filed a claim? (c) Given that the customer has filed a claim, what is the probability that the customer is a good risk?
An automobile insurance company divides customers into three categories, good risks, medium
risks, and poor risks. Assume that 61% of the customers are good risks, 29% are medium risks,
and 10% are poor risks.
Assume that during the course of a year, a good risk customer has
poor risk customer has probability 0.026. A customer is chosen at random.
(a) What is the probability that the customer is a good risk and has filed a claim?
(b) What is the probability that the customer has filed a claim?
(c) Given that the customer has filed a claim, what is the probability that the customer is a good
risk?
a)
It is given that, 61% of the customers are good risks, 29% are medium risks, and 10% are poor risks.
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