quiz2-421 - STT 421 Summer 2008 Quiz #2 Name: PID:...

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STT 421 Summer 2008 Quiz #2 Name: PID: (10pts) Problem 1. An insurance company writes policy that pays $1000 . 00 for the loss due to the theft of a jewelry. The probability of the theft is assessed to be 0.02 and the premium is $80 . 00(in other words the amount you pay to buy the policy is $80 . 00 ). (5pts) (a) Find the distribution function(possible values and corresponding probabilities) of X =profit of the company from one policy in $. (5pts) (b) What is the mean value of X ? 1
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(10pts) Problem 2. Let X 1 ,X 2 ,X 3 , represent the times (random variables) necessary to perform three successive sub-projects at a certain company. Suppose they are independent random variables with means μ 1 = μ 2 = μ 3 = 50 minutes, and Standard deviations σ 1 = σ 2 = σ 3 = 10 minutes. (3pts) a. What is the mean time required for the entire project( X 1 + X 2 + X 3 ) ? (2pts) b. What is the standard deviation of the time required for the entire project? (1pts)
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This note was uploaded on 07/25/2008 for the course STT 421 taught by Professor Nane during the Summer '08 term at Michigan State University.

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quiz2-421 - STT 421 Summer 2008 Quiz #2 Name: PID:...

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