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# An automobile insurance company divides customers into ISBN: 9780073401331 38

## Solution for problem 8E Chapter 2.1

Statistics for Engineers and Scientists | 4th Edition

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Problem 8E

An automobile insurance company divides customers into three categories, good risks, medium risks, and poor risks. Assume that 70% of the customers are good risks, 20% are medium risks, and 10% are poor risks. As part of an audit, one customer is chosen at random.

a. What is the Probability that the customer is a good risk?

b. What is the probability that the customer is not a poor risk?

Step-by-Step Solution:

Step 1 of 2:

(a)

In this question, we are asked to find the probability that the customer is a good risk.

Given data: of customers are good risks. of customers are medium risks. of customers are poor risks.

Since given data is in percentage.

We can say out of 100, 70 customers are good risks.

Hence our probability would be  =   = = 0.7

Hence the probability that the customer is a good risk is 0.70.

Step 2 of 2

##### ISBN: 9780073401331

This full solution covers the following key subjects: risks, poor, customer, good, medium. This expansive textbook survival guide covers 153 chapters, and 2440 solutions. This textbook survival guide was created for the textbook: Statistics for Engineers and Scientists , edition: 4. Statistics for Engineers and Scientists was written by and is associated to the ISBN: 9780073401331. Since the solution to 8E from 2.1 chapter was answered, more than 1065 students have viewed the full step-by-step answer. The full step-by-step solution to problem: 8E from chapter: 2.1 was answered by , our top Statistics solution expert on 06/28/17, 11:15AM. The answer to “An automobile insurance company divides customers into three categories, good risks, medium risks, and poor risks. Assume that 70% of the customers are good risks, 20% are medium risks, and 10% are poor risks. As part of an audit, one customer is chosen at random.a. What is the Probability that the customer is a good risk?________________b. What is the probability that the customer is not a poor risk?” is broken down into a number of easy to follow steps, and 68 words.

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