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I'm having trouble finding the Variance for letter d. For standard deviation, I took a guess. I thought it was either 4469 or 4470 variance
I'm having trouble finding the Variance for letter d. For standard deviation, I took a guess. I thought it was either 4469 or 4470 variance at first but none of those worked so I took a guess and was correct. I'm not sure how to go backwards and find the variance because the variance would have been rounded to get the SD. Thanks
Neighborhood Insurance sells fire insurance policies to local homeowners. The premium is $110, 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 $100,000. Required: a. Make a table of the two possible payouts on each policy with the probability of each. (Negative answers should be indicated with a minus sign.) deviation of your profit? (Do not round intermediate calculations. Round your standard deviation to the nearest whole number.) c. Now suppose your company issues two policies. The risk of fire is independent across the two policies. 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
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