Suppose there is a 0.9850 probability that you will not lose your iPhone before the end of the year. If you lose the phone, however, your insurance policy will pay you $500 to replace it. They don’t pay you anything if you don’t lose the phone. If the policy cost you a one-time fee of $30, what is your expected value? What is the expected value from the insurance company’s perspective?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Suppose there is a 0.9850 probability that you will
not lose your iPhone before the end of the year. If
you lose the phone, however, your insurance policy
will pay you $500 to replace it. They don’t pay you
anything if you don’t lose the phone. If the policy
cost you a one-time fee of $30, what is your
the insurance company’s perspective?
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