An insurance company divides its customers into two groups: (i) high-risk group -- 20% are in this group, and (ii) low-risk group -- 80% are in this group. The high-risk customers make an average of 1 accident per year while the low-risk customers make an average of 0.1 accidents per year. If you are a customer of this company and had no accidents last year, what is the probability that you are a high-risk driver?
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.
An insurance company divides its customers into two groups: (i) high-risk group --
20% are in this group, and (ii) low-risk group -- 80% are in this group. The high-risk
customers make an average of 1 accident per year while the low-risk customers
make an average of 0.1 accidents per year. If you are a customer of this company
and had no accidents last year, what is the
driver?
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