Question 8Consider the toss of a (loaded) coin. In a "good" outcome, punter (bettor) will receive £1in 12 months. In a "bad" outcome she will not receive anything. The fair market price ofthis bet is £0.45 and current prevailing risk-free interest rate is 5%. What is the impliedprobability of a "good" outcome? Assume continuous compounding.A) 0.42230.47310.52690.5594

Given Suppose the probability of Good outcome is P1 and probabilty of bad outcome is P2. Fair market…

Answered: Consider the toss of a (loaded) coin.…

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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Suppose that the life-time of a certain printer follows an exponential distribution with mean 2 years. The manufacture of this printer offers 100% refund if the printer fails during the first year and 50% if it fails during the second year and none afterward. a. Evaluate the probability of full refund. A. 0.05 B. 0.24 C. 0.39 D. 0.47 E. 0.52 b. Assume that each printer costs $100.00. Determine the expected refund for each sold printer. A. 46 B. 51 C. 54 D. 61 E. 66
In the table below x denotes the X-Tract Company’s projected annual profit (in $1,000). The table also shows the probability of earning that profit. The negative value indicates a loss. x f(x) x = profit -100 0.01 f(x) = probability -200 0.04 0 100 0.26 200 0.54 300 0.05 400 0.02 14 If we quadruple each value in the profit column above, the new variance of profit will be. a 187,136 b 183,467 c 179,870 d 46,784
Insurance: An insurance company sells a 1-year term life insurance policy to an 80-year-old man. The man pays a premium of $1200. If he dies within 1 year, the company will pay $21,000 to his beneficiary. According to the U.S. Centers for Disease Control and Prevention, the probability that an 80-year-old man will be alive 1 year later is 0.9437. Let X be the profit made by the insurance company. Part: 0 / 2 Part 1 of 2 (a) Find the probability distribution. The probability distribution is 1200 P(x)
K According to a recent survey, the probability that the driver in a fatal vehicle accident is female (event F) is 0.2929. The probability that the driver is 24 years old or les (event A) is 0.1922. The probability that the driver is female and is 24 years old or less is 0.0529. Answer parts (a) through (d) below. (a) Find the probability of FUA. P(FUA) = 0.4322 (Round to four decimal places as needed.) (b) Find the probability of F'UA. P (F'UA) = (Round to four decimal places as needed.) ...
E and F are mutually exclusive events. P (E) = 0.91; P(F) =0.42 . Find P (E| F )
When it is sunny, Joe's ice cream truck generates a profit of $547 per day, when it is not sunny, the profit is $250 per day, and when the truck is not out there selling ice cream, Joe loses $120 per day. Suppose 8% of a year Joe's truck is on vacation, and 86% of a year the truck is selling ice cream on sunny days, what is the expected daily profit the truck generates over a year? Enter answer as a decimal rounded to TWO digits after the decimal point.
Insurance: An insurance company sells a 1-year term life insurance policy to an 79-year-old woman. The woman pays a premium of $1800. If she dies within 1 year, the company will pay $39,000 to her beneficiary. According to the U.S. Centers for Disease Control and Prevention, the probability that an 79-year-old woman will be alive 1 year later is 0.9561. Let X be the profit made by the insurance company. Part 1 of 2 (a) Find the probability distribution. The probability distribution is X -37200 1800 P(x) 0.0439 0.9561 Alternate Answer: X P(x) Part: 1 / 2 Part 2 of 2 - 37,200 1800 0.0439 0.9561 (b) Find the expected value of the profit. Expected value of the profit is S X 00
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Insurance: An insurance company sells a 1-year term life insurance policy to an 80-year-old woman. The woman pays a premium of $4000. If she dies within 1 year, the company will pay $53,000 to her beneficiary. According to the U.S. Centers for Disease Control and Prevention, the probability that an 80-year-old woman will be alive 1 year later is 0.9259. Let X be the profit made by the insurance company. Part: 0 / 2 Part 1 of 2 (a) Find the probability distribution. The probability distribution is X P(x) 4000 ☑
Insurance: An insurance company sells a 1-year term life insurance policy to an 84-year-old woman. The woman pays a premium of $1400. If she dies within 1 year, the company will pay $46,000 to her beneficiary. According to the U.S. Centers for Disease Control and Prevention, the probability that an 84-year-old woman will be alive 1 year later is 0.9714. Let X be the profit made by the insurance company. Part: 0 / 2 Part 1 of 2 (a) Find the probability distribution. The probability distribution is x 1400 X P(x)

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