{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

finama540 - Final Exam Problem 1(15 pts An insurance...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
MA540 Page | 1 Final Exam Problem 1 (15 pts.) An insurance company issues life insurance policies in three separate categories: standard, preferred, and ultra-preferred. Of the company’s policyholders, 50% are standard, 40% are preferred, and 10% are ultra-preferred. Each standard policyholder has probability 0.010 of dying in the next year, each preferred policyholder has probability 0.005 of dying in the next year, and each ultra-preferred policyholder has probability 0.001 of dying in the next year. A policyholder dies in the next year. What is the probability that the deceased policyholder was ultra-preferred? Problem 2 (15 pts.) A company is reviewing tornado damage claims under a farm insurance policy. Let X be the portion of a claim representing damage to the house and let Y be the portion of the same claim representing damage to the rest of the property. The joint density function of X and Y is Determine the probability that the portion of a claim representing damage to the house is less than 0.2.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}