1. Coffee Co. determines its losses have the following distribution: a. Sketch t
ID: 2713698 • Letter: 1
Question
1. Coffee Co. determines its losses have the following distribution:
a. Sketch the probability distribution and comment on the shape of the distribution (skew and kurtosis) [no calculations of skew or kurtosis are necessary, just discuss the shape]
Loss
Prob.
$-
0.8
$ 15,000.00
0.08
$ 30,000.00
0.06
$ 400,000.00
0.05
$ 7,000,000.00
0.01
What is the probability that losses exceed $30,000?
What is the probability that losses are less than $400,000?
What is the standard deviation of the liability losses?
Loss
Prob.
$-
0.8
$ 15,000.00
0.08
$ 30,000.00
0.06
$ 400,000.00
0.05
$ 7,000,000.00
0.01
Explanation / Answer
Ans 3
Ans 1 Probability that Loss Exceeds 30000 Probablity of Loss of 400000+Probablity of loss of 7000000 6% Ans 2 Probability that Loss less than 400000 Probablity of Loss of 30000+Probablity of loss of 15000+Probablity of no loss 94%Related Questions
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