RM - 100 70 50 30 23 7 0.357=100/280 0.25=70/280...

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Sheet1 Number of pilots having 4 accidents is: 500-300-150-25-20= 5 Frequency probability distribution: # of accidents Probability distribution per pilot # of pilots having accidents 0 300 0.6 1 150 0.3 2 25 0.05 3 20 0.04 4 5 0.01 b)Expected Frequency: 0(0.6) + 1(0.3) +2(0.05)+3(0.04)+4(0.01)=0.56 c) Variance= (0-0.56)^2 x 0.6 +(1-0.56)^2 x 0.3 +(2-0.56)^2 x 0.05+(3-0.56)^2 x 0.04 +(4-0.56)^2x 0.01=0.706 =0.188+0.058+0.104+0.238+0.118=0.706 D) Standard deviation = square root of 0.706= 0.840 E)CV=Standard deviation/mean = 0.840/0.56=1.5 F)EL= ES x EF= 8000x 0.56=4480 (dollars per pilot) G) Expected loss for all pilots: 4480x500=2240000 (dollars) 2. total accidents=0(300)+1(150)+2(25)+3(20)+4(5)=280 (accidents) number of accidents having loss 30000= 280-100-70-50-30-23=7 (accidents) $ loss per accident(1)# of accidents(2) Probability Distribution(3) (cl4)Severity distribution (cl1xcl3) Total losses(cl2xcl4) 2,000 4,000 8,000 12,000 15,000 30,000
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Unformatted text preview: 100 70 50 30 23 7 0.357=100/280 0.25=70/280 0.176=50/280 0.107=30/280 0.082=23/280 0.025=7/280 714(dollar/accident) 714000 1000(dollar/accident) 70000 1408(dollar/accident) 70400 1284(dollar/accident) 38520 1230 (dollar/accident) 28290 750 (dollar/accident) 5250 ES=6836 total loss=926460 B. the random variable is the dollar amount per accident c. ES= 6836 (dollar/accident) D. EL= ES x EF= 6836 x 0.56=3828,18 (dollar/accident) 4. Probability of pilots having 4 accidents: 1-0.3-0.25-0.20-0.15=0.1 Ef (mean)= 0(0.3)+1(0.25)+2(0.2)+3(0.15)+4(0.1)=1.3 standard deviation= square root 1.75= 1.32 Page 1 Sheet1 to compare risk, we need to compute coeffecient variation: Cv (esatern)= 1.5 cv (western)= 1.32/1.3=1.02 Coefficenint variation of esatern is grater than western so Eastern region is riskier. b. Because we have diffrent Means in the two region. the coefficient of variation (CV) is a measure of dispersion of a probabili Page 2...
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This homework help was uploaded on 04/20/2008 for the course RISK MANAG 2101 taught by Professor Drennan during the Spring '07 term at Temple.

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RM - 100 70 50 30 23 7 0.357=100/280 0.25=70/280...

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