×
Get Full Access to Probability And Statistics For Engineers And The Scientists - 9 Edition - Chapter 3 - Problem 36e
Get Full Access to Probability And Statistics For Engineers And The Scientists - 9 Edition - Chapter 3 - Problem 36e

×

# Let X be the damage incurred (in \$) in a certain type of ISBN: 9780321629111 32

## Solution for problem 36E Chapter 3

Probability and Statistics for Engineers and the Scientists | 9th Edition

• Textbook Solutions
• 2901 Step-by-step solutions solved by professors and subject experts
• Get 24/7 help from StudySoup virtual teaching assistants Probability and Statistics for Engineers and the Scientists | 9th Edition

4 5 1 340 Reviews
15
2
Problem 36E

Let X be the damage incurred (in \$) in a certain type of accident during a given year. Possible X values are 0, 1000, 5000, and 10000, with probabilities .8, .1, .08, and .02, respectively. A particular company offers a \$500 deductible policy. If the company wishes its expected profit to be \$100, what premium amount should it charge?

Step-by-Step Solution:

Answer Step 1 of 3 Let x=The damage incurred y=premium should charge g=The cost to insurance company Then g(x)=x-500 y(x)=E(g(x))+100 P(x)= probability assigned

Step 2 of 3

Step 3 of 3

##### ISBN: 9780321629111

Unlock Textbook Solution