A renter's insurance policy is written to cover a loss, X, where X has a Uniform distribution

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A renter's insurance policy is written to cover a loss, X, where X has a Uniform distribution with boundaries ranging from no loss up to a maximum of $2000.
a. What is the expected loss?
b. What is the variance in the loss?
c. If a deductible is set at $500, what is the probability that the loss would be above the deductible?
d. How much money will the insurance company expect to pay on a claim if the deductible is set at $500?
e. How much money will the renter expect to pay on a claim if the deductible is set at $500?
f. At what level must the deductible be set in order for the expected amount of money the insurance company pays on a claim to be only 10% of what it would be if there were no deductible? Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Introduction to Probability

ISBN: 978-0716771098

1st edition

Authors: Mark Daniel Ward, Ellen Gundlach

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