PracticeHomeworkAssignmentTopic4Spring2003

# PracticeHomeworkAssignmentTopic4Spring2003 - RMI001...

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RMI 001 I NTRODUCTION   TO  R ISK  M ANAGEMENT P RACTICE  P ROBLEMS  – T OPIC  4 S PRING  2003 1. Alamo Rental Car Company  has 750 cars at their Philadelphia International Airport  location.  From past information, they have constructed  the following probability  distribution  for the number  of losses per month  per car. # of losses per month per car Probability 0 .05 1 .25 2 .30 3 .05 4 .10 5 .25 a. What is the random  variable illustrated  here? b. Calculate the mean  or expected  number  of losses per month  per car c. Calculate the variance, standard  deviation and  coefficient of variation for Alamo. d. What are the units of measurement  for the mean, variance, standard  deviation  and  coefficient of variation? e. Assume  that when  losses do occur they are always \$1200.  What is the expected   total loss per car per month?  What is the expected  total loss for all cars per  month?  What is the expected  total loss for all cars per year?

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PracticeHomeworkAssignmentTopic4Spring2003 - RMI001...

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