Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 84.0%. If BIC charges a premium of 9,449 silver coins and would pay a death benefit of 46,201 silver coins if the insured were to die, what is the expected value of this insurance policy to BIC?

Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 84.0%. If BIC charges a premium of 9,449 silver coins and would pay a death benefit of 46,201 silver coins if the insured were to die, what is the expected value of this insurance policy to BIC?

Name: Brandybuck Insurance Company (BIC) is deciding whether to insure the l
Uploaded: 2024-03-20T07:06:41.000Z
Channel: Bartleby
Description: Brandybuck Insurance Company (BIC) is deciding whether to insure the lives of those leading a quest to Moria. Based on past experience, the probability of surviving such a quest is 84.0%. If BIC charges a premium of 9,449 silver coins and would pay

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...

See similar textbooks

Related questions

Q: A lottery has a grand prize of $1,000,000, 4 runner-up prizes of $50,000 each, 14 third-place prizes…

A: Given: P(winning $1000000) = 1/13000000P(winning $50000) = 4/13000000P(winning $5000) =…

Q: If the famous insurance company, Brendan's of Jacksonville, insures a $3 million Monet painting for…

A: In the given case there are two possibilities The claim will arrive if painting gets stolen and the…

Q: The star quarterback of a university football team has decided to return for one more season. He…

A: Given that: If the message heard is Yes then there is a 5% chance it will be changed to no so the…

Q: In any given year, a factory has a 10% probability of having a serious accident. About every how…

A: Determine for every many number of years might the factory expect to have an accident. The every…

Q: A stock index consists of businesses in both Europe and the United States. Assume that each business…

A: Given the probability that American business makes a profit = 90% = 0.90 Given the probability that…

Q: If the odds against the Dodgers winning the World Series are 17 t

A: Given that the odds against the Dodgers winning the World series are 17 to 2 That is,…

Q: Mamma Temte bakes six pies a day that cost $2 each to produce. On 27% of the days she sells only two…

Q: Suppose it is certain that an earthquake will occur someday. What is the probability (to the nearest…

A: Given that there are 365 days in a year. So (365×24)=8760 hours in a year. I am at school 4…

Q: An investor has $100,000 to invest this year. One option is to purchase a guaranteed investment…

A: The objective of this question is to determine the best investment option for the investor based on…

Q: A company is trying to decide if they should make a bid on a project that would generate 4500,000 in…

Q: We roll a die once. If 3 or 6 comes up, we win 81 dollars; if 1 comes up, we lose 324 dollars; if…

A: Probability of getting 3 or 6 = 2/6 Probability of getting 1 = 1/6 Probability of any other number…

Q: case of rain. Based on expected values, which is David's wiser choice in this situation? David…

A: The expected net profit is, $100,000. The reduced net profit is , $40,000. The probability of rain…

Q: 3. The defect rate for a laptop is 4%. Assuming the defects occur independently, what is the…

Q: A national chain of hotels has established the policy to allow more bookings than they have rooms as…

Q: Out of 22 students in my daughter's 1st grade class, 15 got Problem 1 right and 18 got Problem 2…

A: There are totally 22 students in my daughter's 1st grade class, 15 got Problem 1 right and 18 got…

Q: You determine that your friend who doesn’t own a car has a 90% chance of calling today because it is…

A: Given data: You determine that your friend who doesn’t own a car has a 90% chance of calling today…

Q: Avicenna, a major insurance company, offers five-year life insurance policies to 65-year-olds. If…

Q: Suppose the probability of an IRs audit is 4.2 percent for U.S taxpayers who file form 1040 and who…

Q: Suppose you are a broker (of junk bonds) who buys only bonds that have a 55% chance of not…

A: Introduction: Denote X as the number of bonds that will not default, among n bonds in a portfolio.…

Q: John and Larry are fundraisers for UNO. A wealthy benefactor says that he will match whatever John…

Q: There is an option of paying $100 to have research conducted to better predict which state of nature…

A: we need to use the conditional probability formula.Let's denote the events as follows: A: State of…

Q: An lventment cou proft of $20,000. However, if the economy goes indo recession, the investment will…

A: Given: Probabilities of profit and loss for various periods. The expected profit is obtained as…

Q: Mr. X owes a lot of money to the mafia. If he misses three weekly payments in a row, the mafia boss…

A: To model the system as a Markov chain, we can define two states: state 0, which represents having…

Q: Compute the expected value of the payoff to a particular client (as was told above, with no…

A: To compute the expected value of the payoff to a particular client with no deductible, we need to…

Q: uppose 58.8% of small businesses experience cash flow problems in their first 5 years. A consultant…

A: Answer Sample size [n] = 557 P = 58.8% =58.8/100 = 0.588 the probability that greater than 55.85%…

Concept explainers

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.

Topic Video

Question

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

$Discrete Probability Distributions$

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, probability and related others by exploring similar questions and additional content below.

Similar questions

Charlie buys a one-year term home insurance policy for $p, that will pay $200,000 in the event of a major catastrophe and $35,000 in the event of a minor catastrophe. Charlie's home has a 0.2% chance of a major catastrophe and a 0.7% of a minor catastrophe during the one year term. What did the insurance company charge Charlie for this policy if the company expected to break even?
Please do question 1f and 1g handwritten
A customer has approached a bank for a $100,000 one-year loan at an 8% interest rate. If the bank does not approve this loan application, the $100,000 will be invested in bonds that earn a 6% annual return. Withoutadditional information, the bank believes that there is a 4% chance that this customer will default on the loan, assuming that the loan is approved. If the customer defaults on the loan, the bank will lose $100,000. At a cost of $1000, the bank can thoroughly investigate the customer’s credit record and supply a favorable or unfavorable recommendation. Past experience indicates that the probability of a favorable recommendation for a customer who will eventually not default is 0.80, and the chance of a favorable recommendation for a customer who will eventually default is 0.15.a. Use a decision tree to find the strategy the bank should follow to maximize its expected profit.b. Calculate and interpret the expected value of information (EVI) for this decision problem.c.…
solve the following
Solve the following probabilty problem: Doris and her friend plan to travel to Florida during the winter intersession period. Based upon the past experience they know that the probability that they go by car is 0.4 and the probability that they go by plane is 0.2. What is the probability that they travel to Florida by car or plane only?
The Business School at State University currently has three parking lots, each containing 155 spaces. Two hundred faculty members have been assigned to each lot. On a peak day, an average of 70% of all lot 1 parking sticker holders show up, an average of 72% of all lot 2 parking sticker holders show up, and an average of 74% of all lot 3 parking sticker holders show up. a. Given the current situation, estimate the probability that on a peak day, at least one faculty member with a sticker will be unable to find a spot. Assume that the number who show up at each lot is independent of the number who show up at the other two lots. Compare two situations: (1) each person can park only in the lot assigned to him or her, and (2) each person can park in any of the lots (pooling). (Hint: Use the RISKBINOMIAL function.) If needed, round your answer to a whole percentage and if your answer is zero, enter "0". No pooling: Pooling: 51.4 % 83.8 % b. Now suppose the numbers of people who show up at…
Suppose an oil company is thinking of buying some land for $10,000,000. There is a 60%60% chance of economic growth and a 40%40% chance of recession. The probability of discovering oil is 44%44% when there is economic growth and 32%32% when there is a recession. If there is economic growth and the oil company discovers oil, the value of the land will triple. If they do not discover oil, the value of the land will decrease by 10%.10%. If there is a recession and the company discovers oil, the value of the land will increase by 50%.50%. If they do not discover oil, the land will decrease in value by 75%.75%. What is the expected value of the investment? Give your answer to the nearest dollar. Avoid rounding within calculations. $$ Select the correct interpretation of the expected value. The expected value represents what the actual investment value will be for this land purchase of $10,000,000. The company should make the investment because the expected value…
Suppose the probability of an IRS audit is 4.0 percent for U.S. taxpayers who file form 1040 and who earned $100,000 or more. ( (b) What are the odds against such a taxpayer being audited? (Round your answers to the nearest whole number.)
< CO 2. There is a 0.9987 probability that a randomly selected 32 year-old male lives through the year. A life insurance company charges $169 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $110,000 as a death benefit. (a) From the perspective of the 32 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 $ (b) If 32 year-old male purchases the policy, what is his expected value? The expected value is $ (Round to the nearest cent as needed.) « Previous Next » LAON 23 3D 昌吧 MacBook Air 000 000 DD F7 公 F3 F4 F5 F6 F8 $ 4 5. 6 80
It is the beginning of September and you have been offered the following deal to go heli-skiing. If you pick the first week in January and pay for your vacation now, you can get a week of heli-skiing for $2,900. However, if you cannot ski because the helicopters cannot fly due to bad weather, there is no snow, or you get sick, you do not get a refund. There is a 30% probability that you will not be able to ski. If you wait until the last minute and go only if you know that the conditions are perfect and you are well, the vacation will cost you $4,600. You estimate that the pleasure you get from heli-skiing is worth $6,700 per week to you (if you had to pay more than that, you would choose not to go). If your cost of capital is 11% per year, should you book ahead or wait? You should because the NPV of this choice is $ book ahead wait (Round to two decimal places.)
solve the following
the sales manager knows that 10% of his clients do not pay their debts in full. He supposes that he selects a sample of 100 clients. What is the probability that 14% or more will not be fulfilled in their obligations?