Question

In Problem 11 from the previous section, we stated that the damage amount is normally distributed. Suppose instead that the damage amount is triangularly distributed with parameters 500, 1500, and 7000. That is, the damage in an accident can be as low as $500 or as high as $7000, the most likely value is $1500, and there is definite skewness to the right. Use @RISK to simulate the amount you pay for damage. Run 5000 iterations. Then answer the following questions. In each case, explain how the indicated event would occur.
a. What is the probability that you pay a positive amount but less than $750?
b. What is the probability that you pay more than $600?
c. What is the probability that you pay exactly $1000 (the deductible)?



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  • CreatedApril 01, 2015
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