An insurance company found that 2.5% of male drivers between the ages of 18 and 25 are involved in serious accidents annually. Assume that every such accident costs the company $65,000 and that a driver can only have one of these accidents in a year.   If the company charges $2,500 for such coverage, what is the probability that it loses money on a single policy?   Suppose that the company writes 1,000 such policies to a collection of drivers. What is the probability that the company makes a profit on these policies? Assume that the drivers do not run into each other and behave independently.    Does the difference between the probabilities of parts (a) and (b) explain how insurance companies stay in business? Large auto insurers are certainly profitable. One report, for example, claims that Allstate pays out less than $0.50 in accident claims for every dollar

Q: If a pregnant woman is told that she will give birth to fraternal twins, what is the probability…

A: In this case, each baby has the only options of being "a girl" (defined as success) or "a boy"…

Q: A lottery has a grand prize of $360,000, three runner-up prizes of $45,000 each, nine third-place…

A: According to the given information:Total grand price for lottery(x1) = $360,000Total runner up price…

Q: One-fourth of the married couples in a far-off society have exactly three children. The other…

A: Answer can be given using the simple concept of probability.

Q: a) If a financial firm sells these bonds for ​$61,000 what is the chance that the firm loses money…

A: As per our guidelines, we are allowed to answer three sub-parts only Given : Benefit payable on…

Q: An airline company is considering a new policy of booking as many as 218 persons on an airplane that…

A: Given n=218 P=0.90

Q: A sign on the pumps at a gas station encourages customers to have their oil checked, and claims that…

A: Let X be the number of cars needs to have oil added. Given: n=84 and p=1/5=0.2 Hence, X ~ B (n=84,…

Q: a. If all your computer data is stored on a hard disk drive with a copy stored on a second hard…

A: Assume that there is a 4​% rate of disk drive failure in a year. 1-p= 0.04, p=0.96 a) The…

Q: A newspaper vendor notes that his profit for the day is more than $100 with a probability of 0.7 on…

A: Conditional Probability: Let A and B be two events with P(A) > 0. Then the conditional…

Q: An airline is planning its staffing needs for the next year. If a new route is​ approved, it will…

A: Given data: The number of employees hired if the new route approve is a=964. The number of employees…

Q: In an insurance portfolio 10% of the policy holders are in Class A₁ (high risk), 40% are in Class A₂…

A:

Q: The probability that both babies have birth defects is

A: Approximately 3% of all births in the United States result in birth defects each year. That is,…

Q: An airline is planning its staffing needs for the next year. If a new route is approved, it will…

A: Formula: E(X) = ∑i=1nXiP(Xi) Given: X1 = 801, P(X1) = 0.31, X2 = 199.

Q: Assume that there is a 7% rate of disk drive failure in a year. a. If all your computer data is…

A: Given, Assume that there is a 7% rate of disk drive failure in a year.a. If all your computer data…

Q: 3. Over the years, a medical researcher has found that one out of every ten diabetic patients…

A: Solution: Let X: The number of diabetic patients receiving insulin develops antibodies against the…

Q: An insurance company will sell a fire insurance policy for a house similar to mine for $1000 (for…

A: The table is shown below

Q: According to the estimation of a particular insurance company, in a particular year, 1 out of each…

A: The probability of a fire outbreak can be calculated as: Probability = Number of favorable…

Q: A sign on the pumps at a gas station encourages customers to have their oil checked, and claims that…

A: x: Car needs oil. X ~ Bin(n,p) Where p = 1/5 = 0.20 P(X) = nCx * px * ( 1 - p)n-x

Q: water due on the mortgage is larger than the value of the home). There are 160 homes in the…

A: It is given that Probability, p = 35% = 0.35Sample size, n = 160

Q: An insurance company will sell a fire insurance policy for a house similar to mine for $1000 (for…

A:

Q: Suppose that Revenue Canada will audit 20% of income tax returns reporting an annual income of more…

A: Given,n=15p=0.2q=1-p=1-0.2=0.8A random variable X~Binomial(n=15 , p=0.2)P(X=x)=15x 0.2x0.815-x     ;…

Q: Investment in new issues (the stock of newly formed companies) can be both suicidal and rewarding.…

A:

Q: If records indicate that 4 houses out of 1000 are expected to be damaged by fire in any year, what…

A: Given that 4 houses out of 1000 are expected to be damaged by fire in any year. Therefore,…

Q: If BIC charge

A:

Q: Assume that about 45% of all U.S. adults try to pad their insurance claims. Suppose that you are the…

A:

Q: An airline is planning its staffing needs for the next year. If a new route is approved, it will…

A:

Q: Assume that there is a 66​% rate of disk drive failure in a year.   a. If all your computer data is…

A: Introduction: A catastrophe would be caused if all the hard disk drives available to a person fail…