# An insurance policy issued to a boat owner has a deductible amount of $1000, so the amount of damage claimed

## Question:

An insurance policy issued to a boat owner has a deductible amount of $1000, so the amount of damage claimed must exceed this deductible before there will be a payout. Suppose the amount (1000s of dollars) of a randomly selected claim is a continuous rv with pdf ƒ(x) = 3/x^{4} for x > 1. Consider a random sample of three claims.

a. What is the probability that at least one of the claim amounts exceeds $5000?

b. What is the expected value of the largest amount claimed?

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## Step by Step Answer:

**Related Book For**

## Modern Mathematical Statistics With Applications

**ISBN:** 9783030551551

3rd Edition

**Authors:** Jay L. Devore, Kenneth N. Berk, Matthew A. Carlton

**Question Details**

Chapter #

**5**Section: Exercises

Problem: 117

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