An insurance company offers its policyholders a number of different premium payment options. For a randomly selected policyholder, let X = the number of months between successive payments The cdf of X is as follows: x< 1 0.35 1sx< 3 3 Sx< 4 10.50 4 Sx < 6 6 sx< 12 0.46 F(x) = 0.88 12 SX (a) What is the pmf of X? 1 4 6 12 P(x) (b) Using just the cdf, compute P(3 s xs 6) and P(4 s X). P(3 s x 5 6) = P(4 s X) =

An insurance company offers its policyholders a number of different premium payment options. For a randomly selected policyholder, let X = the number of months between successive payments The cdf of X is as follows: x< 1 0.35 1sx< 3 3 Sx< 4 10.50 4 Sx < 6 6 sx< 12 0.46 F(x) = 0.88 12 SX (a) What is the pmf of X? 1 4 6 12 P(x) (b) Using just the cdf, compute P(3 s xs 6) and P(4 s X). P(3 s x 5 6) = P(4 s X) =

Name: An insurance company offers its policyholders a number of different p
Uploaded: 2024-03-05T11:52:21.000Z
Channel: Bartleby
Description: An insurance company offers its policyholders a number of different premium payment options. For a randomly selected policyholder, let X = the number of months between successive payments.The cdf of X is as follows:X< 11sx < 30.353 Sx < 44 sx< 60.46

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter2: Systems Of Linear Equations

Section2.4: Applications

Problem 28EQ

See similar textbooks

Similar questions

An insurance company offers its policyholders a number of different premium payment options. For a randomly selected policyholder, let X = the number of months between successive payments.
An insurance company offers its policyholders a number of different premium payment options. For a randomly selected policyholder, let X = the number of months between successive payment
At the Acme Cement Company, employeescontribute to a welfare fund at the rate of 4% ofthe first $1000 earned, 3% of the next $1000,2% of the next $1000, and 1% of any additionalincome. What will Mr. Morris contribute in ayear in which he earns $20,000?
The government is attempting to determine whetherimmigrants should be tested for a contagious disease. Let’sassume that the decision will be made on a financial basis.Assume that each immigrant who is allowed into the countryand has the disease costs the United States $100,000, andeach immigrant who enters and does not have the diseasewill contribute $10,000 to the national economy. Assumethat 10% of all potential immigrants have the disease. Thegovernment may admit all immigrants, admit no immigrants,or test immigrants for the disease before determiningwhether they should be admitted. It costs $100 to test aperson for the disease; the test result is either positive ornegative. If the test result is positive, the person definitelyhas the disease. However, 20% of all people who do havethe disease test negative. A person who does not have thedisease always tests negative. The government’s goal is tomaximize (per potential immigrant) expected benefits minusexpected costs. Use a decision…
Consider the following payoff matrix.
Data on the 4000 largest mutual funds shows which funds provided a high 5-year return and a high 10-year return. Of the 4000 mutualfunds surveyed, 3000 funds had a high 5-year return, 2000 had a high 10-yearreturn, and 1500 had both a high 5-year return and a high 10-year return Given that a mutual fund had a high 5-year return, what is theprobability of a mutual fund having a high 10-year return?
Use table D, the Standard Ultimate Survival Model with i=5%. Consider a 25-year term insurance isued to a life aged 35 with annual premiums payable throught the policy term, with sum insured $100,000 payable at the end of the year of death if death occurs during the term. Expenses are as follows: 10% of the 1st annual premium and 2% of each subsequent premium, with an inception expense of $100 and renewal expenses of (at the time of the payment of the 2nd and each subsequent premium) of $15. Calculate the annual premium (using the equivalence principle).
Suppose a company charges a premium of $150 per year for an insurance policy for storm damage to roofs. Actuarial studies show that in case of a storm, the insurance company will pay out an average of $8000 for damage to a composition shingle roof and an average of $12,000 for damage to a shake roof. They also determine that out of every 10,000 policies, there are 7 claims per year made on composition shingle roofs and 11 claims per year made on shake roofs. What is the company’s expected value (i.e., expected profit) per year of a storm insurance policy? What annual profit can the company expect if it issues 1000 such policies? Determine the probability of a composition shingle roof claim out of 10,000 = ______ Determine the probability of a shake roof claim out of 10,000 = ______ How many claims are made out of 10,000? = _______ What is the probability of no claims out of 10,000? = _______ How much does each shingle roof claim cost the company, don’t forget each person pays $150…
A multinational corporation is considering starting a subsidiary in an Asiancountry. Management realizes that the success of the new subsidiary depends, in part,on the ensuing political climate in the target country. Management estimates that theprobability of success (in terms of resulting revenues of the subsidiary during its firstyear of operation) is 0.55 if the prevailing political situation is favorable, 0.30 if thepolitical situation is neutral, and 0.10 if the political situation during the year is unfavorable. Management further believes that the probabilities of favorable, neutral, andunfavorable political situations are 0.6, 0.2, and 0.2, respectively. What is the successprobability of the new subsidiary?
A store manager observes that the morale of employees in her supermarket is low. She thinks that if their working conditions are improved, pay scales rose, and the vacation benefits made more attractive, the morale will be boosted. She doubts, however, if an increase in pay scales would raise the morale of all employees. Her conjecture is that those who have supplemental incomes will just not be “turned on” by higher pay, and only those without side incomes will be happy with increased pay, with a resultant boost in morale Based on the scenario presented, answer the following questions: A) Identify the Independent, Dependent, Moderating, and Mediating Variables. Also provide justification for your choice. B) Create a schematic diagram (i.e., conceptual framework) that depicts the relationships among the variables. C) Based on the above conceptual framework develops at least four alternate hypotheses.
An investor has decided to commit no more than $80,000 to the purchase of the common stocks of two companies, Company A and Company B. He has also estimated that there is a chance of at most a 1% capital loss on his investment in Company A and a chance of at most a 4% loss on his investment in Company B, and he has decided that these losses should not exceed $2000. On the other hand, he expects to make a(n) 15% profit from his investment in Company A and a(n) 18% profit from his investment in Company B. Determine how much he should invest in the stock of each company (x dollars in Company A and y dollars in Company B) in order to maximize his investment returns. What are the (x,y) values? What is the optimal profit?
An investor has decided to commit no more than $80,000 to the purchase of the common stocks of two companies, Company A and Company B. He has also estimated that there is a chance of at most a 1% capital loss on his investment in Company A and a chance of at most a 4% loss on his investment in Company B, and he has decided that these losses should not exceed $2000. On the other hand, he expects to make a(n) 15% profit from his investment in Company A and a(n) 18% profit from his investment in Company B. Determine how much he should invest in the stock of each company (x dollars in Company A and y dollars in Company B) in order to maximize his investment returns.(x, y)= What is the optimal profit?$