Sprine 2018 Math 2526-02 Applied Stats Homework 2, due 2/7 10 Score Name 1. Roll

Question

Sprine 2018 Math 2526-02 Applied Stats Homework 2, due 2/7 10 Score Name 1. Roll a die If the number is 6, yuu will win $10, if the number is or larger than 3 (1. 2 ) you will lose S3. If the nunber is 4 or S, no lose or win Find the expectation 2· Consider a simple game You pick two cards from an ordinary deck (52 cards), if you a pair, you win. Otherwise, you lose S1. To set the game fair, how much you should gain when you win? get 3. Suppose a car insurance company has 5,000 customers. The premium for each car one year is $1200. Assume there are three kinds of accidents, the major, moderate, and minor The company should pay a major accident $15,000, a moderate accident $5,000, and a minor accident $1.000. Based on previous record, the probabilities for these accidents happen are 0.02, 0.1, and 0.2, respectively. Estimate the annual revenue of the company

Explanation / Answer

1) Dice = 1,2,3,4,5,6

For 1,2,3 = -$3 (Loss)

For 4,5 = $0( No change)

For 6 = $10( Gain)

The expectation value:

E(X) = -3(0.1667) -3(0.1667) -3(0.1667) + 0 *0.1667 + 0* 0.16667 + 10*0.16667 = -1.5 + 1.6667 = $0.16667

Rolls 1 2 3 4 5 6 Probability 0.166667 0.166667 0.166667 0.166667 0.166667 0.166667 Winning -3 -3 -3 0 0 10

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.