Based on historical data, an insurance companyestimates that a particular customer has a 1.4%likelihood of having an accident in the next year,with the average insurance payout being $1500.If the company charges this customer an annualpremium of $50, what is the company's expectedvalue of this insurance policy?

Given: The annual premium = $50 Average insurance payout = $1500 Likelihood of having accident =…

Answered: Based on historical data, an insurance…

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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What was the second largest year-on-year increase for females? Average Cost (£GBP) of Car Insurance for Males and Females over a 5 year period 789 638 Year 1 872 635 Year 2 854 742 Year 3 Males 878 801 Year 4 Females 890 873 Year 5 Please select the correct answer from the options shown. → Years 1 to 2 Years 2 to 3 Years 3 to 4 Years 4 to 5 Ø Next
Need only handwritten solution only (not typed one).
A paper included analysis of data from a national sample of 1,000 Americans. One question on the survey is given below. "You owe $3,000 on your credit card. You pay a minimum payment of $30 each month. At an Annual Percentage Rate of 12% (or 1% per month), how many years would it take to eliminate your credit card debt if you made no additional charges?" Answer options for this question were: (a) less than 5 years; (b) between 5 and 10 years; (c) between 10 and 15 years; (d) never-you will continue to be in debt; (e) don't know; and (f) prefer not to answer. A USE SALT (a) Only 355 of the 1,000 respondents chose the correct answer of "never." Assume that the sample is representative of adult Americans. Is there convincing evidence that the proportion of adult Americans who can answer this question correctly is less than 0.40 (40%)? Use the five-step process for hypothesis testing (HMC3) described in this section and a = 0.05 to test the appropriate hypotheses. (Hint: See Example…
There is a 0.9991 probability that a randomly selected 33-year-old male lives through the year. A life insurance company charges $166 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $100,000 as a death benefit. Complete parts (a) through (c) below. a. From the perspective of the 33-year-old male, what are the monetary values corresponding to the two events of surviving the year and not surviving? The value corresponding to surviving the year is $ The value corresponding to not surviving the year is $ (Type integers or decimals. Do not round.) b. If the 33-year-old male purchases the policy, what is his expected value? The expected value is $ (Round to the nearest cent as needed.) c. Can the insurance company expect to make a profit from many such policies? Why? because the insurance company expects to make an average profit of $ on every 33-year-old male it insures for 1 year. (Round to the nearest cent as needed.)
A buyer paid $41,400,including the buyer's premium, for a car auction. If the auction adds a 15% buyer's premium to the sale price of the car, then what was the sale price of the car? The sale price of the car was $.....(Type an integer or a decimal.)
Tom called his bank today to check on his savings account balance. He was surprised to find a balance of $6600, when he started the account with just $5000.00 8 years ago. Based on this data, what percentage rate has the bank been paying on the account with simple interest?
A paper included analysis of data from a national sample of 1,000 Americans. One question on the survey is given below. "You owe $3,000 on your credit card. You pay a minimum payment of $30 each month. At an Annual Percentage Rate of 12% (or 1% per month), how many years would it take to eliminate your credit card debt if you made no additional charges?" Answer options for this question were: (a) less than 5 years; (b) between 5 and 10 years; (c) between 10 and 15 years; (d) never—you will continue to be in debt; (e) don't know; and (f) prefer not to answer. The paper also reported that 37.1% of those in the sample chose one of the wrong answers (a, b, or c) as their response to this question. Is it reasonable to conclude that more than one-third of adult Americans would select a wrong answer to this question? Use ? = 0.05. (Round your test statistic to two decimal places and your P-value to four decimal places.) State the appropriate null and alternative hypotheses. H0: p =…

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Based on historical data, an insurance company estimates that a particular customer has a 1.4% likelihood of having an accident in the next year, with the average insurance payout being $1500. If the company charges this customer an annual premium of $50 what is the company's exnected