This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: are called the mean and standard deviation of the normal density. Exercise 1. The loss due to a fire in a commercial building is modeled by a random variable X having density function, What is the probability of having a loss exceeding 5? 2. The time until failure of a certain electronic device follows the probability density function , t = number of days Determine the probability that the device will fail within 30 days. 3. . Determine the density function of Y = a X + b for some constants a, b with a>0. 4. An actuary is designing a new game for a casino. Out of the 100 games, the mean of the expected profit of the casino on the new game is 5, and the variance is 100. Using a normal approximation, a) Determine the probability that the casino’s profit exceeds 10. b) Determine the probability that the casino’s loss exceeds 15. . c) Determine the probability that the casino’s profit range from loss of 20 to profit of 15 out of the 100 games. . d) If the casino is certain of making profit of probability 5%, what is the expected profit?...
View Full Document