Modern Business Statistics with Microsoft Excel (MindTap Course List)

5th Edition

ISBN: 9781285433301

Author: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams

Publisher: Cengage Learning

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Textbook Question

Chapter 5.3, Problem 20E

The probability distribution for damage claims paid by the Newton Automobile Insurance Company on collision insurance follows.

Payment ($)	Probability
0	.85
500	.04
1000	.04
3000	.03
5000	.02
8000	.01
10000	.01

a. Use the expected collision payment to determine the collision insurance premium that would enable the company to break even.
b. The insurance company charges an annual rate of $520 for the collision coverage. What is the expected value of the collision policy for a policyholder? (Hint: It is the expected payments from the company minus the cost of coverage.) Why does the policyholder purchase a collision policy with this expected value?

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Chapter 5.3, Problem 19E

Chapter 5.3, Problem 21E

Chapter 5 Solutions

Modern Business Statistics with Microsoft Excel (MindTap Course List)

Ch. 5.1 - 1. Consider the experiment of tossing a coin...Ch. 5.1 - 2. Consider the experiment of a worker assembling...Ch. 5.1 - 3. Three students scheduled interviews for summer...Ch. 5.1 - Prob. 4E Ch. 5.1 - 5. To perform a certain type of blood analysis,...Ch. 5.1 - 6. Listed is a series of experiments and...Ch. 5.2 - 7. The probability distribution for the random...Ch. 5.2 - 8. The following data were collected by counting...Ch. 5.2 - Prob. 9E Ch. 5.2 - 10. The percent frequency distributions of job...

Ch. 5.2 - 11. A technician services mailing machines at...Ch. 5.2 - 12. Time Warner Cable provides television and...Ch. 5.2 - 13. A psychologist determined that the number of...Ch. 5.2 - Prob. 14E Ch. 5.3 - 15. The following table provides a probability...Ch. 5.3 - 16. The following table provides a probability...Ch. 5.3 - Prob. 17E Ch. 5.3 - 18. The American Housing Survey reported the...Ch. 5.3 - 19. West Virginia has one of the highest divorce...Ch. 5.3 - 20. The probability distribution for damage claims...Ch. 5.3 - 21. The following probability distributions of job...Ch. 5.3 - 22. The demand for a product of Carolina...Ch. 5.3 - 23. In Gallup’s Annual Consumption Habits Poll,...Ch. 5.3 - Prob. 24E Ch. 5.4 - 25. Given below is a bivariate distribution for...Ch. 5.4 - 26. A person is interested in constructing a...Ch. 5.4 - 27. The Chamber of Commerce in a Canadian city has...Ch. 5.4 - 28. PortaCom has developed a design for a...Ch. 5.4 - 29. J.P. Morgan Asset Management publishes...Ch. 5.4 - 30. In addition to the information in exercise 29...Ch. 5.5 - 31. Consider a binomial experiment with two trials...Ch. 5.5 - Prob. 32E Ch. 5.5 - 33. Consider a binomial experiment with n = 20 and...Ch. 5.5 - 34. For its Music 360 survey, Nielsen Co. asked...Ch. 5.5 - 35. The Center for Medicare and Medical Services...Ch. 5.5 - 36. When a new machine is functioning properly,...Ch. 5.5 - Prob. 37E Ch. 5.5 - 38. Military radar and missile detection systems...Ch. 5.5 - Twelve of the top 20 finishers in the 2009 PGA...Ch. 5.5 - 42. A Gallup Poll showed that 30% of Americans are...Ch. 5.5 - Prob. 43E Ch. 5.6 - 44. Consider a Poisson distribution with μ =...Ch. 5.6 - 45. Consider a Poisson distribution with a mean of...Ch. 5.6 - 46. Phone calls arrive at the rate of 48 per hour...Ch. 5.6 - 47. During the period of time that a local...Ch. 5.6 - In 2011, New York City had a total of 11,232 motor...Ch. 5.6 - 49. Airline passengers arrive randomly and...Ch. 5.6 - 50. According to the National Oceanic and...Ch. 5.6 - The National Safety Council (NSC) estimates that...Ch. 5.7 - Prob. 52E Ch. 5.7 - Prob. 53E Ch. 5.7 - 54. A recent survey showed that a majority of...Ch. 5.7 - 55. Blackjack, or twenty-one as it is frequently...Ch. 5.7 - 56. Axline Computers manufactures personal...Ch. 5.7 - 57. The Zagat Restaurant Survey provides food,...Ch. 5.7 - Prob. 58E Ch. 5 - 59. The U.S. Coast Guard (USCG) provides a wide...Ch. 5 - 60. The Car Repair Ratings website provides...Ch. 5 - 61. The budgeting process for a midwestern college...Ch. 5 - 62. A bookstore at the Hartsfield-Jackson Airport...Ch. 5 - 63. The Knowles/Armitage (KA) group at Merrill...Ch. 5 - Prob. 64SE Ch. 5 - 65. The following table shows the percentage of...Ch. 5 - Prob. 66SE Ch. 5 - Prob. 67SE Ch. 5 - Prob. 68SE Ch. 5 - Arrivals to a Car Wash. Cars arrive at a car wash...Ch. 5 - Prob. 70SE Ch. 5 - Prob. 71SE Ch. 5 - Prob. 72SE

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Solution Summary: The author calculates the probability distribution for the damage claims paid by an insurance company on collision insurance. The expected value of the collision policy for a policy holder is 90.

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