An insurance agent sells two types of policies to clients, both life insurance and auto insurance. The
Question:
(a) Find the expected value and variance of the number of life insurance policies.
(b) Find the expected value and variance of the number of auto insurance policies.
(c) Find and interpret E(XY) in the context of this problem.
(d) Find the correlation between X and Y. (Hint: You can use the alternative formula for the covariance shown in the Formulas section at the end of the chapter.)
(e) Interpret the size of the correlation for the agent.
(f) The agent earns +750 from selling a life insurance policy and +300 from selling an auto policy. What are the expected value and standard deviation of the earnings of this agent from policies sold to a client?
DistributionThe 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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Related Book For
Statistics For Business Decision Making And Analysis
ISBN: 9780134497167
3rd Edition
Authors: Robert A. Stine, Dean Foster
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