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John has the following utility function: U = 2Y(0.25) (i.e. 2 x Y raised to the 0.25 power), where Y is the amount of John's income in any given period. John's income is $92,000 per year, and during that time, there is a 3% probability that he will have a serious medical event that would cost him $35,000 in medical expenses.
1. Enter a formula to calculate John's expected utility
2. Enter a formula to calculate an optimal, actuarially fair insurance premium.
3. Enter a formula to calculate John's utility if he purchased this optimal insurance policy
4. Given his utility function and risk of loss, what is the maximum John would be willing to pay for insurance?
5. What is John's risk premium?
You are planning to test a vaccine for a virus that has no vaccine. Since the disease is usually not serious, you will expose 100 volunteers to the virus. After some time, you will record whether or not each volunteer has been infected.
You reach into the drawer in the dark and randomly pick out a pair for your business trip. What is the probability your pick out 1 yellow pair?
Suppose that the Goodyear Tire Company has historically held 42% of the market for automobile tires in the United States. Recent changes in company operations.
Identify the population of interest in the following situation:
The Federal Trade Commission (FTC) Staff Report "Self-Regulatory Principles for Online Behavioral Advertising" defines behavioral advertising.
Suppose 37% of a company's computer keyboards are manufactured in Los Angeles, and 63% in Detroit. Suppose 2% of the keyboards made in Los Angeles.
Estimate the variance and standard error of the sample mean when you randomly sample n = 8 subjects and get 2, 6, 10, 1, 15, 22, 11, 29.
a. How many of the employees would you expect to have voted for President Bush? b. All of the employees indicated that they voted in the 2004 presidential election. Determine the probability of this assuming they followed the national trend. c. Ei..
The variation in time for a baked good to go through a conveyor oven at a large scale bakery has standard deviation 0.017 minute at every time setting.
Calculate a 95% confidence interval for the difference in the proportions of birth defects when the contaminated well was in use and when the contaminated well was not in use.
Interstate 90 is the longest of the east-west U.S. interstate highways with its 3,112 miles stretching from Boston, MA at I-93 on the eastern end to Seattle WA at the Kingdome on the western end. It travels across 13 northern states; the number of..
A set of data has a mean of 66 feet and a standard deviation of 3 feet ( and has a bell shaped curve). Describe completely.
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