Reference no: EM132394268

1. What was the average weekly profit for the prior 12-month period? Determine and define the variance and standard deviation of weekly profit.

2. How confident are you of this estimate? Calculate a 99% confidence interval for weekly profits, assuming that sigma is unknown. What does this tell you about weekly profits?

3. Based on the above, what is the expected exposure on the lost profits claim?

(Expected exposure = construction costs of $464,900 + total expected profits for last six months)

Week of  Profits

6-Dec-04  19,449

13-Dec-04  31,452

20-Dec-04  42,877

27-Dec-04  13,738

3-Jan-05  17,843

10-Jan-05  87,256

17-Jan-05  41,825

24-Jan-05  7,655

31-Jan-05  20,011

7-Feb-05  51,420

14-Feb-05  53,378

21-Feb-05  39,835

28-Feb-05  30,096

7-Mar-05  -13,375

14-Mar-05  27,362

21-Mar-05  12,921

28-Mar-05  27,203

4-Apr-05  9,182

11-Apr-05  52,694

18-Apr-05  48,790

25-Apr-05  -37,171

2-May-05  27,951

9-May-05  -474

16-May-05  18,858

23-May-05  31,779

30-May-05  52,949

6-Jun-05  51,970

13-Jun-05  36,518

20-Jun-05  4,806

27-Jun-05  55,257

4-Jul-05  26,128

11-Jul-05  59,364

18-Jul-05  23,085

25-Jul-05  26,848

1-Aug-05  77,382

8-Aug-05  44,031

15-Aug-05  48,471

22-Aug-05  39,595

29-Aug-05  2,930

5-Sep-05  71,505

12-Sep-05  28,982

19-Sep-05  46,696

26-Sep-05  61,143

3-Oct-05  42,113

10-Oct-05  65,394

17-Oct-05  34,938

24-Oct-05  14,364

31-Oct-05  15,919

7-Nov-05  41,679

14-Nov-05  58,859

21-Nov-05  37,873

28-Nov-05  27,297