A First Course in Probability (10th Edition)
A First Course in Probability (10th Edition)
10th Edition
ISBN: 9780134753119
Author: Sheldon Ross
Publisher: PEARSON
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You purchase a brand new car for $17,000 and insure it. The policy pays 78% of the car's value if there is an issue with the engine or 30% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.009, and the probability there is an issue with the speaker system is 0.02. The premium for the policy is p.
Let X be the insurance company's net gain from this policy.
(a)
Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right.
X
 
 
 
 
 
 
P(X)      
 
 
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