manufactures electronics. The development analysts estimate that 2% of their flagship product will fail within 2 years of the purchase date, with a replacement cost of $ 1200. A newly hired associate at the company proposes to charge $ 15 for a 2 year warranty. a. Compute the expected value of this proposal. Let X be the amount profited or lost (by the company) on the warranties and P(X) is the probability. E=E=

Q: An LG Dishwasher, which costs$800, has a20%chance of needing to be replaced in the first 2 years of…

A: Given,An LG Dishwasher, which costs $800, has a 20% chance of needing to be replaced in the first 2…

Q: Suppose you are considering investing in two opportunities, a Dow Jones Fund and a Weak-Economy…

A: Given, Suppose you are considering investing in two opportunities, a Dow Jones Fund and a…

Q: Suppose my utility function for asset position x is given by u (x) = 100 I now have $20,701 and am…

A:

Q: A 5 year endowment assurance contract provides a death benefit of €15,000 at the end of the policy…

A: The chance of occurrence of observation in the sample or event with equal likelihood to all the…

Q: Prize value Number of prizes £1 million 2 6 11 24 60 116 £100,000 £50,000 £25,000 £10,000 £5,000…

A: Solution: From the given information,

Q: Consider a 5-year bond with a face value of $100 that pays an annual coupon of 6% and is currently…

A: a) Let's start by calculating the bond's value and expected return for each rating scenario after…

Q: Suppose you want to build a diversified and risk-averse portfolio. However, there is one "dark…

A:

Q: A company estimates that 0.3% of their products will fail after the original warranty period but…

A:

Q: Q3 Suppose X and Y are the net profits of two different investments. It is known that they have the…

A:

Q: The expected value is $

A: Given : The player awarded for winning amount is $245 The probability that player winning the game…

Q: Use the given information to find the indicated probability. P(A ∪ B) = 0.8, P(B) = 0.5, P(A ∩ B) =…

A:

Q: An insurance company estimates the probability of an earthquake in the next year to be 0.0013. They…

A: Let X represent the insurance company's payout X P(X) 0 0.9987 60000 0.0013 E(X)=∑x…

Q: The Texas DOT is comparing two alternative pavement treatments with the following characteristics.…

A: For getting the least expensive alternative, we will use effective annual cost method. Please find…

Q: Fred wants to sell his car, and the offers for his car are i.i.d. Exponential r.v.s with mean…

A: Approach to solving the question:Given that the offers for Fred's car are independent and…

Q: 5. ISE has installed a new air purifying system in all 25 lecture rooms, one per room. Suppose 2 of…

A: Given information: μGood=5λGood=15=0.20μDefective=1λDefective=11=1.0

Q: An experiment consists of making a A. Not all above B. Probability 1 C. Expectation value D.…

A: Experiment, if in each trial of an experiment conducted under identical conditions, the outcome is…

Q: Long-distance calling plan A offers flat-rate service at 10 cents per minute. Calling plan B charges…

A: The objective of this question is to determine which long-distance calling plan, A or B, offers a…

Q: The probability that you will receive a wrong number call this week is 0.1. The probability that you…

A: From the provided information, Let A represent the event that he will receive a wrong number call…

Q: The probability that a 50-year-old male in the U.S. will die within one year is about 0.00142. An…

A: P(die within one year) = 0.00142 P(do not die) = 1-0.00142 = 0.99858 Insurance policy value : $30000…

Q: ise money by raffling a trip worth $500. It nnings for a person who buys 1 ticket.

A: NOTE-AS PER POLICY I HAVE CALCULATED FIRST MAIN QUESTION ONLY     Here Charitable trust sold 3000…

Q: You are given the following excerpt from a life table, including mortality rates and expected value…

A: Given the excerpt from a life table, including mortality rates and expected of a 1 unit whole life…

Q: The manager of Alaina’s Garden Center must make theannual purchasing plans for rakes, gloves, and…

A: Given, Quarter 1 Year 1 Year 2 1  45 67 2 339 444 3 299 329 4 222 283 Total 905 1123…

Q: parts​ (a) through​ (d) below. a. What is the probability that the​ student's alarm clock will not…

A:

Q: Using the linear probability model, estimate the probability of a loan being approved when the Down…

A:

Q: You are offered an investment that will generate annual cash flows for 12 years starting one year…

A: The present value (PV) of an investment refers to the current worth of all the future cash flows…

Q: Asset X pays 2 if state 1 occurs and 4 if state 2 occurs and costs 3. Asset Y pays 3 if state 1…

A: GivenAsset X pay 2 if state 1 occur.Asset X pay 4 if state 2 occur. Asset Y pay 3 if state 1…

Q: 15. Consider the extract from a life table: X lx 70 150 71 125 72 100 73 75 74 50 75 25 Calculate…

A: The data set of the life table is xlx701507112572100737574507525

Q: Miranda decided to buy a $50,000 term life insurance policy from Palmetto Insurance Company to cover…

A: To find the expected cost we will multiply the total amount by the corresponding probability. Age…

Q: Following an exponential distribution, the average lifespan of a smartphone battery is 2.3 years.…

A: Following an exponential distribution, the average lifespan of a smartphone battery is 2.3 years.…

Q: A company estimates that 0.8% of their products will fail after the original warranty period but…

A: They are selling extended warranty for $32 Also 0.8 will fail and they would incur $250 on that…

Q: A polluter has abatement costs given by: MAC = 165 -0.11E They are causing damages: MD = 0.14E The…

A: Given: Abatement cost, MAC=165-0.11E Damages, MD=0.14E Determine the financial incentive for them to…

Q: The manufacturer of a fertilizer guarantees that, with the aid of the fertilizer, 65% of planted…

A: Given that manufacturer claim that 65% of the planted seeds will germinate  then probability of…

Q: A portfolio's value increases by 20% during a financial boom and by 7% during normal times. It…

A: We have given that  A portfolio's value increases by 20% during a financial boom and by 7% during…

Q: 4 . Suppose you bought two computers, one has an exponential life time of mean 10 years and the…

A: The cumulative distribution function for the lifetime of the first computer is given by the cdf of…

Q: 49. Suppose that a particular light bulb is advertised as having an average lifetime of 2,000 hours…

A: a) The life time of bulb follows an exponential distribution with a mean of 2000 hours. That is 1/ λ…

Q: Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal…

A:

Q: Given the monthly returns that follow, find the R2, alpha, and beta of the portfolio. Compute the…

A: MonthPortfolio ReturnS&P 500 Return…

Q: machine consists of two components: A and B. The machine needs both components to operate. As soon…

A: Given that, A machine consists of two components: A and B. The machine needs both components to…

Q: Assume that deaths are uniformly distributed between integral ages. Calculate the expected present…

A: Formula: Ax:n1=Ax:n-ExnHere, Ax:n and Exn values are obtained from the standard ultimate life table.…