Compute the expected value

Assignment Help Mathematics

Reference no: EM13120275

Calculating average Insurance Premium

This table shows claims and their probablity for an insurance company.

AMOUNT OF CLAIM PROBABILITY
$0 0.65
$50,000 0.25
$100,000 0.06
$150,000 0.02
$200,000 0.01
$250,000 0.01

1. Calculate the expected value?

2. How much should the company charge as an average premium so that it breaks even on its claim cost?

3. How much should the company charge to make a profit of $50 per policy?

Reference no: EM13120275

Questions Cloud

Mathematical induction-pascal triangle : Please help me with the attached pre-calculus questions. Use mathematical induction to prove that 6 is a factor of n (n + 1)(n + 2).

Illustarte what is the new pressure : Five cubic feet of a gas at 90 pisg and 75 degree F are compressed to a volume of 2 cubic feet and the heated to a temperature of 250 degree F illustarte what is the new pressure? (General Ideal Gas Law)

Direct materials cost and direct labor cost : What term is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and factory overhead cost?

Create a histogram of the final fund values : Two strategies over the 6-year period. Create a histogram of the final fund values. Based on your simulation results, which of the two strategies would you recommend? Why?

Compute the expected value : Calculate the expected value. How much should the company charge as an average premium so that it breaks even on its claim cost?

What is the ph of the buffer : A buffer contains 0.30 M acetic acid and 0.20 M sodium acetate. What is the pH of the buffer as prepared and after 0.030 mol/L of a strong acid or 0.030 mol/L of a strong base are added (Ka = 1.8 x 10-5).

Ellipse and hyperbola : Find the equation of the Ellipse whose foci coincide with the foci of the hyperbola x^2 - 3y^2 - 2x - 12y + 1 = 0 and whose eccentricity is the reciprocal of that of the hyperbola and sketch both curves.

Corporation law or conceptual frameworks : Discuss why individual has different way of choosing different method of accounting. Do you think particular Accounting Standard, Corporation Law or Conceptual Frameworks reducing different choice of Accounting Method? Or Standardization will reso..

Probability that both cars are silver or both are white : Choose a new car or light truck at random and note its color. Here are the probabilities of the most popular colors for vehicles. Choose two vehicles at random. What is the probability that both are silver or both are white?

User Account

All Pages