Question
John has purchased the insurance policy from an insurance company to cover the value of his house in case if it gets destroyed due
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.)
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Federal Taxation 2016 Comprehensive
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
29th Edition
134104374, 978-0134104379
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