Answered: You are employed at an insurance…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

You are employed at an insurance company and are asked to calculate the probabilities of various financial losses due to hurricanes. Typically hurricanes tend to cause $10 billion worth of losses (i.e. claims) with a standard deviation of 4 billion and these losses are normally distributed. D) what amount of losses would put a hurricane in the top 1% of losses?

(D) What amount of losses would put a hurricane in the top 1% of losses?
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X-Normal(mean=10,standard deviation=4)
A) P(4<X<12)=P((4-10)/4<(X-µ)/o<(12-10)/4)
=P(-1.5<z<0.5)=0.6247
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B) P(x<1)=P((X-µ)/o<(1-10)4)
P(z<-2.25)=0.0122
C) P(x>20)=P((X-µY>(20-10)/4))
P(z>2.5)=0.0062
Number=100×P(x>20)=100×0.0062=0.62|

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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