C. An insurance company has a portfolio of 10,000 policies. Based on past data, the company estimates that the probability of a claim on any policy in a year is 0.003. It assumes no policy will generate more that one claim in a year. (i) Determine the approximate probability of more than 40 claims from the portfolio of 10,000 policies in a year. (ii) Determine an approximate equal tailed interval into which the number of claims per year will fall with the probability 0.95. In practice 42 claims were received in a particular year. A director of the company complains about the range of estimates in part (ii) being wrong. (i) Comment on the director's complaint.
C. An insurance company has a portfolio of 10,000 policies. Based on past data, the company estimates that the probability of a claim on any policy in a year is 0.003. It assumes no policy will generate more that one claim in a year. (i) Determine the approximate probability of more than 40 claims from the portfolio of 10,000 policies in a year. (ii) Determine an approximate equal tailed interval into which the number of claims per year will fall with the probability 0.95. In practice 42 claims were received in a particular year. A director of the company complains about the range of estimates in part (ii) being wrong. (i) Comment on the director's complaint.
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
Transcribed Image Text:C. An insurance company has a portfolio of 10,000 policies. Based on past data, the
company estimates that the probability of a claim on any policy in a year is 0.003.
It assumes no policy will generate more that one claim in a year.
(i) Determine the approximate probability of more than 40 claims from the
portfolio of 10,000 policies in a year.
(ii) Determine an approximate equal tailed interval into which the number of
claims per year will fall with the probability 0.95.
In practice 42 claims were received in a particular year. A director of the
company complains about the range of estimates in part (ii) being wrong.
(i) Comment on the director's complaint.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Recommended textbooks for you
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman