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robability of a mild accident is 0.014. et X be the insurance company's net gain or loss on the policy described. (a) Create a probability distribution for X. Enter the possible values of X in ascending order from left to right. 139500 1x T✓ X -6700 P(X) 0.961 1x 0.014 279000 0.005 x x (b) Compute the company's expected net gain on this policy. Round your answer to the nearest cent. €99207 Tx

robability of a mild accident is 0.014. et X be the insurance company's net gain or loss on the policy described. (a) Create a probability distribution for X. Enter the possible values of X in ascending order from left to right. 139500 1x T✓ X -6700 P(X) 0.961 1x 0.014 279000 0.005 x x (b) Compute the company's expected net gain on this policy. Round your answer to the nearest cent. €99207 Tx

Calculus For The Life Sciences
Calculus For The Life Sciences
2nd Edition
ISBN:9780321964038
Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Publisher:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.
Chapter12: Probability
Section12.2: Introduction To Probability
Problem 52E
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You purchase a workers' compensation insurance policy to protect against accidents at your workplace. If you have a serious accident, the policy will pay you $279,000. If you have a mild accident, the policy will pay you $139,500. The premium for the policy is $6,700. Based on your work environment's history, the probability of a serious accident is 0.005, and the probability of a mild accident is 0.014. Let X be the insurance company's net gain or loss on the policy described. (a) Create a probability distribution for X. Enter the possible values of X in ascending order from left to right. X P(X) -6700 0.981 X X 139500 0.014 X 279000 0.005 X X (b) Compute the company's expected net gain on this policy. Round your answer to the nearest cent. $ 9920.7 X
Transcribed Image Text:You purchase a workers' compensation insurance policy to protect against accidents at your workplace. If you have a serious accident, the policy will pay you $279,000. If you have a mild accident, the policy will pay you $139,500. The premium for the policy is $6,700. Based on your work environment's history, the probability of a serious accident is 0.005, and the probability of a mild accident is 0.014. Let X be the insurance company's net gain or loss on the policy described. (a) Create a probability distribution for X. Enter the possible values of X in ascending order from left to right. X P(X) -6700 0.981 X X 139500 0.014 X 279000 0.005 X X (b) Compute the company's expected net gain on this policy. Round your answer to the nearest cent. $ 9920.7 X
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