John has purchased the insurance policy from an insurance company to cover the value of his...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
John has purchased the insurance policy from an insurance company to cover the value of his house in case if it gets destroyed due to a fire for the price of $2000 per year. John's house is worth $230000 and the probability that fire destroys the house during the length of the policy is estimated to be 0.2%. Let X be the insurance company's profit. Answer the following questions: 1. Create the probability distribution table for X : X outcome the house is destroyed the house survived profit x,$ P(X = x) 2. Use the probability distribution table to find the following: a. E[X] =x = b. SD[X] = 0x = dollars. (Round the answer to 1 decimal place.) dollars. (Round the answer to 1 decimal place.) John has purchased the insurance policy from an insurance company to cover the value of his house in case if it gets destroyed due to a fire for the price of $2000 per year. John's house is worth $230000 and the probability that fire destroys the house during the length of the policy is estimated to be 0.2%. Let X be the insurance company's profit. Answer the following questions: 1. Create the probability distribution table for X : X outcome the house is destroyed the house survived profit x,$ P(X = x) 2. Use the probability distribution table to find the following: a. E[X] =x = b. SD[X] = 0x = dollars. (Round the answer to 1 decimal place.) dollars. (Round the answer to 1 decimal place.)
Expert Answer:
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
Students also viewed these finance questions
-
If we took three different random samples of high school students (one from California, one from Nebraska, and one from Alabama) and each sample had 500 students, what would the sampling distribution...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
CANMNMM January of this year. (a) Each item will be held in a record. Describe all the data structures that must refer to these records to implement the required functionality. Describe all the...
-
Consider the plane stress inhomogeneous case with only variation in elastic modulus given by E = E(y) = 1/ (Ay + B). Further assume that the Airy function depends only on y, = (y). Show that...
-
On January 1 of this year, Houston Company issued a bond with a face value of $10,000 and a coupon rate of 5 percent. The bond matures in three years and pays interest every December 31. When the...
-
The Club Ltd was incorporated on 15 May 2017 and took over the business of Poker Ltd on 1 June 2017. It was agreed that all profits made from 1 June should belong to The Club Ltd and that the vendors...
-
Describe a demographic group that may not prefer investment risk. Describe another demographic group that may be more comfortable with a greater degree of risk.
-
The bookkeeper for Lowell's Country Music Bar went insane and left this incomplete balance sheet. Lowell's working capital is $90,000 and its debt to assets ratio is 40 percent. Required Complete the...
-
Activity-Based Supplier Costing Bowman Company manufactures cooling systems. Bowman produces all the parts necessary for its product except for one electronic component, which is purchased from two...
-
Choice Designs Ltd operates a wholesale/retail carpet store. The statement of financial position of the business as at 31 May Year 8 is as follows: As a result of falling profits the directors of the...
-
What is the purpose of accelerating depreciation (AD)? a. AD allows a greater depreciation expense earlier in the life of the asset, producing a lower taxable net income and therefore lower taxes. b....
-
Mademoiselle Company produces women's handbags. The cost of producing 1,180 handbags is as follows: Direct materials Direct labor Factory overhead Total manufacturing cost $14,000 8,800 6,500 $29,300...
-
The following data is available for A1 Corporation at December 31, 2025 (2pts.): Common stock, par $10 Treasury stock (at cost $15 per share), 2,000 shares Based on the data, how many shares of...
-
The controller of Cullumber Production has collected the following monthly cost data for analyzing the behavior of electricity costs. Total Electricity Costs Total Machine Hours January $2,540 290...
-
Under the Internal Revenue Code, large companies are generally required to: Capitalize more period costs as product costs as an inventory cost for tax purposes under the IRC than would be required...
-
At the end of the current year, Accounts Receivable has a balance of $600,000; Allowance for Doubtful Accounts has a debit balance of $5,500; and sales for the year total $2,700,000. Bad debt expense...
-
K Q QUESTION 8 The second variation will have you graphing pq vs. p + q. Manipulate the Lens Equation into a form that provides an appropriate line of best fit. For the toolbar, press ALT+F10 (PC) or...
-
What are three disadvantages of using the direct write-off method?
-
On April 15 of Year 2, Adam and Renee Tyler jointly filed a Year 1 return that reported AGI of $68,240 ($20,500 attributable to Renee) and a tax liability of $3,050. They paid this amount in a timely...
-
What changes in accounting method can be made without IRS approval?
-
Martin owns equipment used in his trade or business purchased four years ago for $200,000. Martin sells the equipment in the current year for $110,000 when its adjusted basis is $52,000. No other...
-
A company maintains its fixed assets at cost. Depreciation provision accounts, one for each type of asset, are in use. Machinery is to be depreciated at the rate of 12% per cent per annum, and...
-
A company starts in business on 1 January 19X3, the financial year end being 31 December. You are to show: (a) The machinery account. (b) The provision for depreciation account. (c) The balance sheet...
-
A company depreciates its plant at the rate of 20 per cent per annum, straight line method, for each month of ownership. From the following details draw up the plant account and the provision for...
Study smarter with the SolutionInn App