An insurance company writes a policy to the effect that an amount of money A must bepaid if some event E occurs within a year. If the company estimates that E will occurwithin a year with probability p, what should it charge the customer in order that itsexpected profit will be 10 percent of A?

An insurance company writes a policy to the effect that an amount of money A must be paid if some…

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A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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During one year, a particular mutual fund outperformed the S&P 500 index 32 out of 52 weeks. Find the probability that it would perform as well or better again. The probability is (Round to four decimal places as needed.)
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An insurance policy on an electrical device pays a benefit of $2400 if the device fails during the first year. The amount of the benefit decreases by $800 each successive year until it reaches 0 . If the device has not failed by the beginning of any given year, the probability of failure during that year is 0.29.Find the expected benefit under this policy.
A company prices its tornado insurance using the following assumptions: • In any calendar year, there can be at most one tornado. • In any calendar year, the probability of a tornado is 0.15. • The number of tornadoes in any calendar year is independent of the number of tornados in any other calendar year. Using the companys assumptions, calculate the probability that there are fewer than 3 tornadoes in a 15-year period. Round your answer to 4 decimals. Show your work. Show what you entered into your calculator.
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An insurance company writes a policy to the effect that an amount of money A must be paid if some event E occurs within a year. If the company estimates that E will occur within a year with probability p, what should it charge the customer in order that its expected profit will be 10 percent of A?