Question
STATS 3011 UMN You plan to purchase dental insurance for yourthreeremaining years inschool. The insurance makes a one-time payment of $1,000 in case of a
STATS 3011 UMN
You plan to purchase dental insurance for yourthreeremaining years inschool. The insurance makes a one-time payment of $1,000 in case of a major dental repair(such as an implant ) or $100 in case of a minor repair (such as a cavity). If you don't need dental repair over the next 3 years, the insurance expires and you receive no payout. You estimate the chances of requiring a major repair over the next 3 years as 5%, a minor repair as 60% and no repair as 35%.
a. Why is X= payout of dental insurance a random variable?
b. Is X discrete or continuous? What are its possible values?
c. Give the probability distribution of X.
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