(for example, two 1s or two 2s) with the roll of two fair dice, meaning you win $7 if you succeed and you lose $1 if you tosses), dnu Is this incre fail. law of large at this poir 19-20: Insurance Claims. Find the expected value (to the company) per policy sold. If the company sells 10,000 policies, what is the expected profit or loss? Explain. c. How ma order to b: 19. An insurance policy sells for $1000. Based on past data, an average of 1 in 50 policyholders will file a $10,000 claim, an average of 1 in 100 policyholders will file a $25,000 claim, and an average of 1 in 250 policyholders will file a $60,000 claim. d. Suppos keep play Explain h 24. Gambler 20. An insurance policy sells for $600. Based on past data, an followin number average of 1 in 50 policyholders will file a $5000 claim, an av- of 1 in 100 policyholders will file a $10,000 claim, and an average of 1 in 200 policyholders will file a $30,000 claim. erage a. Suppo How m 21. Expected Wait. Suppose you arrive at a bus stop randomly, so all arrival times are equally likely. The bus arrives regularly every 30 minutes without delay (say, on the hour and on the b. On th 47 ever over 20
Addition Rule of Probability
It simply refers to the likelihood of an event taking place whenever the occurrence of an event is uncertain. The probability of a single event can be calculated by dividing the number of successful trials of that event by the total number of trials.
Expected Value
When a large number of trials are performed for any random variable ‘X’, the predicted result is most likely the mean of all the outcomes for the random variable and it is known as expected value also known as expectation. The expected value, also known as the expectation, is denoted by: E(X).
Probability Distributions
Understanding probability is necessary to know the probability distributions. In statistics, probability is how the uncertainty of an event is measured. This event can be anything. The most common examples include tossing a coin, rolling a die, or choosing a card. Each of these events has multiple possibilities. Every such possibility is measured with the help of probability. To be more precise, the probability is used for calculating the occurrence of events that may or may not happen. Probability does not give sure results. Unless the probability of any event is 1, the different outcomes may or may not happen in real life, regardless of how less or how more their probability is.
Basic Probability
The simple definition of probability it is a chance of the occurrence of an event. It is defined in numerical form and the probability value is between 0 to 1. The probability value 0 indicates that there is no chance of that event occurring and the probability value 1 indicates that the event will occur. Sum of the probability value must be 1. The probability value is never a negative number. If it happens, then recheck the calculation.
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