Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Alderan Toy Store faces the following probability distribution of fire losses in its store over the next year: Probability .83 .15 .02 Loss 0 10,000

Alderan Toy Store faces the following probability distribution of fire losses in its store over the next year:

Probability

.83

.15

.02

Loss

0

10,000

25,000

H, Calculate the expected value and standard deviation of Alderans losses for the year.

I) Assume that Alderan pools his losses with Dagobahs store, which has an identical loss distribution. Dagobahs losses are independent of Alderans. Alderan and Dagobah agree to split the total losses in the pool equally. Show the revised probability distribution for the mean loss from the pool.

J) Calculate the expected value and standard deviation of the pooled mean losses.

image text in transcribed

H) Probability Loss Expected Value of Loss Column 1 Loss outcomes Column 2 Column 3 Probabilities Loss Outcome Expected Loss Squared Difference Squared Difference x Probability Column 4 Column 5 Variance Standard Deviation Alderan's Loss Dagobah's Los Total Loss Mean Loss Probability Expected Value of Loss Column 1 Loss outcomes Column 2 Column 3 Column 4 Column 5 Probabilities Loss Outcome Expected Loss Squared Difference Squared Difference x Probability Sum Variance Standard Deviation

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Robonomics Prepare Today For The Jobless Economy Of Tomorrow

Authors: John Crews

1st Edition

1530910463, 978-1530910465

More Books