Question 3

Mason Steel Corp had 1000 employees in each of the past 5 years. Over the 5 year period, 1500 workers were injured. Estimate the probability of injury for a particular worker (the expected frequency).

Question 2

?Consider two individuals: Sati and kali.

?Suppose that the probability of a car accident for each of them is 20 percent or 0.20 causing a loss of 2500 dollars.

?Suppose that their accidents are uncorrelated.

?Consider a pooling arrangement in which sati and Hunter agree to split evenly any accident cost that occurs (we call this a pooling arrangement because sati and Kali are pooling their resources to cover their loss from possible accidents).

Show that the pooling arrangement is beneficial to them.

Question 1

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