You are given these information regarding two groups of health insurance customers:Group A: 5% probability of claiming medical insurance to a total of $100,000Group B: 40% probability of claiming medical insurance to a total of $100,000Assume that there are 1000 individuals in each groupBased on the information given above, discuss the problem of adverse selection that occur betweenthe consumers and the health insurance companies.

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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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The table below gives the two-way classification of 400 randomly selected persons based on their status as a smoker or a nonsmoker and on the number of visits they made to their physicians last year. Suppose you must test the hypothesis at 5% level of significance whether there is a relationship between smoking and visits to the physician. Status Visits to the Physician 0-1 2-4 >=5 Smoker 25 60 75 Nonsmoker 110 90 40 The conclusion will be: a) Since 2 56.428 is not greater than 2 s =0.103. we then reject the null hypothesis at 5% level of 0.95.2 significance and conclude that smoking and visits to the physician are related. O b) Since x-= 56.428 is greater than xos ,=0.103, we then fail to reject the null hypothesis at 5% level of significance and conclude that smoking and visits to the physician are related. O c) Since x= 56.428 is greater than xos =0.103 we then reject the null hypothesis at 5% level of significance %3D 95.2 and conclude that smoking and visits to the physician are…
Adela Noriegam, a researcher wants to determine how employee salaries at a certain company are related to the length of employment, previous experience, and education. The researcher selects eight employees from the company and obtains the following data: Employee Salary,y Employment (in yrs), x1 Employment (in yrs), x2 Employment (in yrs), x3 A 57310 10 2 16 B 57380 5 6 16 C 54135 4 1 12 D 56985 6 5 14 E 58715 8 8 16 F 60000 20 0 12 G 59400 9 4 18 H 60720 15 7 17 What is the regression equation? Leave your answer in 2 decimal places Y = ()+() +() +
In an interview for a job, the interviewer says that the average annual income of the company's 16 employees is $73,610. The actual annual incomes of the 16 employees are shown below. Which measure of central tendency would be most informative to the potential employee? OOO O O median O mode O mean Orange $12,500 $12,500 $16,430 $17,305 $17,408 $18,980 $20,432 $24,540 $25,676 $28,906 $28,956 $32,654 $94,024 $98,213 $250,921 $478,320
The table below shows the auto insurance quotes for two leading companies for a sample of 15 families. Assume the populations SDs are similar, but unknown. The President of the American Insurance Institute wants to compare the yearly costs of such insurance offered by the two companies. At the 0.10 level of significance, can we conclude that there is a difference in the amounts quoted? Families Southern Car American Mutual ($) ($) 1 2090 1610 2 1683 1247 3 1402 2327 4 1830 1367 5 930 1461 6 697 1789 7 1741 1621 8 1129 1914 9 1018 1956 10 1881 1772 11 1571 1375 12 874 1527 13 1579 1767 14 1577 1636 15 860 1188
A sample of 349 students at a university is surveyed. The students are classified according to gender ("female" or "male"). They are also classified according to major ("biology", "business", "engineering", "mathematics", or "computer science"). The results are given in the contingency table below. Biology Business Engineering Mathematics Computer science Female 40 24 33 44 32 Male 29 35 32 37 43 What is the relative frequency of female students in the sample? Round your answer to two decimal places. 0 X S ?
Twelve HSS students have been randomly assigned to one of three different statistics classes: one is taught by Professor Lavigne, another is taught by a monkey, and the last group has no professor and requires that students learn on their own. Here are the data: Final grade in class: Prof Lavigne: 67,74,82,55 Monkey: 43,66,52,10 No professor: 97,87,86,78 We now want to figure out if the average final grade in each class is different from one another. What kind of analysis does this require? One-way ANOVA A series of two-sample t-tests A series of one-sample t-tests None of the above What degrees of freedom are needed to answer the following question: Are average final grades statistically different in each group? 10 11 2 and 9 3 and 12 No degrees of freedom can be used
The following table shows a data set containing information for 25 of the shadow stocks tracked by the American Association of Individual Investors (aaii.com, February 2002). Shadow stocks are common stocks of smaller companies that are not closely followed by Wall Street analysts. The data set is also on the website that accompanies the text in the file named Shadow02. a. How many elements are in this data set? b. Of the following subset of variables, indicate which are categorical and which are quantitative: Exchange ["quantative", "categorical"] , Price/Earnings Ratio ["quantitive", "categorical"] , Gross Profit Margin. ["quantitive", "categorical"] c. Indicate the scale of measurement for the variables: Exchange, Price/Earnings Ratio, Gross Profit Margin (%): Exchange is ["ratio scale", "interval scale", "ordinal scale", "nomial scale"] Price/Earnings Ratio is ["ratio scale", "interval scale", "ordinal scale", "nomial scale"] Gross Profit…
Based on a study by Dr. P. Sorita at Indiana University, assume the eye colors in the United States are distributed as follows: 40% brown, 35% blue, 12% green, 7% gray, 6% hazel a. If one person is randomly selected, what is the probability that this person will have brown or blue eyes? b. If two people are randomly selected, what is the probability that at least one of them has brown eyes?
Please answer part a-d with correct answer.
4. A third year HRM student did a research on the level of service being provided by the school canteen. The following table shows the results of her study. The manager of the canteen would like to know whether the data gathered by the student apply to the professor of the university. He asked randomly selected 60 professors. The following table shows the data he collected. Frequency of Responses Percentage professors (Observed) Excellent 30 5 Good 40 15 Fair 20 20 Рor 10 10

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