Question: During a driving training session, a learner driver made 3 driving errors. The probability of a driving error resulting in an accident is 0.25. Each

During a driving training session, a learner driver made 3 driving errors. The probability of a driving error resulting in an accident is 0.25. Each accident lead to a loss that can be modelled by an exponential distribution with mean 0.8. The insurance policy will only cover 70% of each loss due to an accident, and so the policy holder needs to pay 30% out-of-pocket.

What is the variance of the total out-of-pocket cost the driver experiences due to accidents resulting from this training session? Hint :Use the law of total variance

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