Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need these answered fast please! I will rate! Neighborhood insurance seds fire insurance policles to local homeowners. The premium is $120, the probability of
I need these answered fast please! I will rate!
Neighborhood insurance seds fire insurance policles to local homeowners. The premium is $120, the probability of a fire is 0.1%, and in the event of a fire, the insured damages the payout on the policy will be $110,000. Required: a. Make a tabie of the two possible payouts on each policy with the probability of each. (Negative answers should be indicated with a minus sign.) b. Suppose you own the entire firm, and the company issues only one policy. What are the expected value, variance, and standard deviation of your profir? (Do not round intermediate calculations. Round your standard deviation to the nearest whole numbec) c. Now suppose your company issues two policles. The risk of fire is independent across the two policles. Make a table of the three possible payouts along with their associated probabilities. (Negative answers should be indicated with a minus sign. Round your "Probability" answers to 4 decimal places.) d. What are the expected value, variance, and standard deviation of your profit? (Do not round intermediate calculations. Round your standard deviation to the nearest whole number.) Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started