SIE 305 Fall 2017StudentN Exam 2 2 (40 Points) - Answe Last, First Date: Secorre

Question

SIE 305 Fall 2017StudentN Exam 2 2 (40 Points) - Answe Last, First Date: Secorrect answer will get partial credit based on approach and the k r the following problems. Show all work explicitly Problem 1 (20 points)- An insurance company offers its policy makers a number of different payment options. For a randomly selected policybolder, let X number of months between successive payments. The CDF is as follows: 20 F(X)0 30 80 a.) Complete the following table of the pmf of the random variable, X 5 6 810 12 p(x) What is the probability of a policyholder having a payment plan longer than $ months? b.) c.) What is the probability that the next policyholder askes for a payment option between 3 and 6 months inclusive? d.) What is the probability that a policyholder's payment plan is less than 8 months?

Explanation / Answer

p(x=1)=0.2

p(x=3)=0.3-0.2=0.1

p(x=4)=0.45-0.3=0.15

p(x=6)=0.80-0.45=0.35

p(x=12)=1-0.8=0.2

b)P(x>5)=0.35+0.2=0.55

c)P(3<=x<=6)=0.1+0.15+0.35=0.6

d)P(x<8)=1-0.2=0.8

x p(x) 1 0.2 3 0.1 4 0.15 6 0.35 12 0.2

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