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Unformatted text preview: MA540 Page  1 Final Exam Problem 1 (15 pts.) An insurance company issues life insurance policies in three separate categories: standard, preferred, and ultrapreferred. Of the company’s policyholders, 50% are standard, 40% are preferred, and 10% are ultrapreferred. 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 ultrapreferred 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 ultrapreferred? 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...
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This note was uploaded on 02/27/2010 for the course MA 540 taught by Professor Prasad during the Spring '10 term at Stevens.
 Spring '10
 prasad

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