What is the probability of a customer wanting Medium Coverage or being eligible

Question

What is the probability of a customer wanting Medium Coverage or being eligible for Private Coverage? P(Medium or Private) You are assigned 15 to process and determine what policies they are eligible for. Six want minimal coverage, 5 want medium coverage 4 want full coverage. You select one at a time. a. What is the probability your first wants full coverage? b. what is the probability your second wants medium coverage? c. what is the probability your third wants medium coverage? d. what is the combined probability of the above happening? P (FMM) The insurance company is expected to make a percent of each policy per year. They make more when someone does not use their policy. Use the rates of applications by type from your joint probability table and assume they give out 25,000 policies a year. Show your work to the.

Explanation / Answer

a) probabilty first want full coverage =4/15 =0.2667

b)probabilty second want medium coverage =P(first want medim *second want medium+first do not want medium*second want medium) =(5/15)*(4/14)+(10/15)*(5/14)=70/210=1/3 =0.3333

c)probabilty that third want medium covrage =1/3

d)P(FMM)=(4*5*4)/(15*14*13)=0.0293

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