Examine the table above . The insurance company does not know the probabilities of falling sick for each individual. ( a ) If the company charged everybody a premium of Tk.2,000 , who would stay and who would leave the insurance market ? Say why. (All the questions are the same part of one single question. Please answer them all.) ( b ) If the company charged everybody a premium equal to the average of the actuarially fair premiums for all , who would stay and who would leave ? Say why.

Examine the table above . The insurance company does not know the probabilities of falling sick for each individual. ( a ) If the company charged everybody a premium of Tk.2,000 , who would stay and who would leave the insurance market ? Say why. (All the questions are the same part of one single question. Please answer them all.) ( b ) If the company charged everybody a premium equal to the average of the actuarially fair premiums for all , who would stay and who would leave ? Say why.

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Description: Examine the table above . The insurance company does not know the probabilities of falling sick for each individual.( a ) If the company charged everybody a premium of Tk.2,000 , who would stay and who would leave the insurance market ? Say why.(All

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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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

Insurance
Prob. of
Lost income
Buyer
falling sick
if sick (Tk.)
A
0.20
15,000
В
0.15
20,000
C
0.10
25,000
D
0.05
30,000
E
0.05
20,000
F
0.15
10,000

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A media personality argues that global temperatures are not rising, because every year an increase is reported, such as 0.09 degrees C. The difference from the previous year is less than the margin of error of about 0.13 degrees C, so that difference should be ignored. What is a strong counter argument?