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You recently had an auto accident that was your fault. If you have another accident or receive another moving violation

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You recently had an auto accident that was your fault. If you have another accident or receive another moving violation within the next 3 years, you will become part of the "assigned risk" pool, and you will pay an extra $600 per year for insurance. If the probability of an accident or moving violation is 20% per year, what is the probability distribution of your "extra" insurance payments over the next 4 years? Assume that insurance is purchased annually and that violations register at the end of the year-just in time to affect next year's insurance premium.

Distribution
The 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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Engineering Economics

Engineering Economics

ISBN: 9780195168075

9th Edition

Authors: Ted G. Feller

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Question Posted: February 25, 2010 06:31:43
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