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Question 3 [5 Points] An insurance company charges younger drivers a higher premium than it does older drivers because younger drivers as a group
Question 3 [5 Points] An insurance company charges younger drivers a higher premium than it does older drivers because younger drivers as a group tend to have more accidents. The company has 3 groups: Group A includes those less than 25 years old, have a 22% of all its policyholders, Group B includes those 25-39 years old, have 43% of all its policyholders and Group C includes those 40 years old and older, have 35% of all its policyholders. Company records show that that in any given one-year period, 11% of its Group A policyholders have an accident. The percentages for Group B and C are 3% and 2% respectively. 1. What is the probability that the company's policyholders have an accident during the next 12 months? Answer: 2. Suppose Ahmed has just had a car accident. If he is one of the company's policyholders, what is the probability that he is under 25 years old? Answer:
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