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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 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...
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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