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

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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/x4 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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The amount of a randomly selected claim is a continuous random variable with probability density fun…View the full answer


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Related Book For  answer-question
Modern Mathematical Statistics With Applications

Modern Mathematical Statistics With Applications

ISBN: 9783030551551

3rd Edition

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

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Question Details
Chapter # 5
Section: Exercises
Problem: 117
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Question Posted: August 22, 2023 02:47:11
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