- Math
- Statistics And Probability
- acme insurance company is looking to at its historical claims...
Question: acme insurance company is looking to at its historical claims...
Question details
ACME insurance company is looking to at its historical claims for a particular type of policy. In the past, payouts and their probability of occurring are given by:
|
Payout |
Probability |
|
0 |
0.82 |
|
500 |
0.03 |
|
1000 |
0.05 |
|
3000 |
0.04 |
|
5000 |
0.03 |
|
10000 |
0.02 |
|
15000 |
0.01 |
aA. What is the minimum amount ACME has to charge customers in order to ensure that they break even.
B B) What is the standard deviation of the payout. Does it have any meaning here, and what does it imply about the riskiness of insurance?
d***Please help me work this out on word, no hand written or symbols please***
Solution by an expert tutor
