Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Statistics and Probability Expert

A home owner is considering insuring contents of his house against theft for one year. He approximates that the contents of his house would cost him $40,000 to replace. Local crime statistics point out that there is a probability of 0.03 that his house will be broken in the coming year. In that event his losses would be 10%, 20%, or 40% of the contents with probabilities 0.5, 0.35 and 0.15 respectively.

An insurance policy from company A costs $300 a year but guarantees to replace any losses because of theft. An insurance policy from company B is cheaper at $200 a year but householder has to pay the first $X of any loss himself. An insurance policy from company C is even cheaper at $150 a year but only replaces the fraction (Y%) of any loss suffered.

Suppose that there can be at most one theft a year.

A. Draw decision tree.

B. What would be your advice to the home owner if X = 50 and Y = 40% ?

Statistics and Probability, Statistics

  • Category:- Statistics and Probability
  • Reference No.:- M922895

Have any Question? 


Related Questions in Statistics and Probability

Explain how you would conduct the study in given question

Explain how you would conduct the study in given question as a within-subjects design. Question:- Imagine that you were conducting an experiment to examine the effect of generous role models on children's willingness to ...

Analysis and applicable theoriesfor your analysis select

Analysis and Applicable Theories For your analysis, select two applicable theories content theories and two process theories from the list provided in this course. Please note the theories should be post-Frederick Winslo ...

Imagine that your town or city has increased its nighttime

Imagine that your town or city has increased its nighttime police patrols to reduce crime. Design two quasi-experiments to determine whether this intervention has been effective, one that uses some variation of a nonequi ...

Joshua and his army are planning to circle jericho seven

Joshua and his army are planning to circle Jericho seven times. Will the wall come tumbling down? The king of Jericho reports that: I ascribe probability 0.8 to "the wall of the city will fall, and Joshua ascribes probab ...

In this course you will apply statistical analysis tools

In this course, you will apply statistical analysis tools and biomedical research methodologies to health information management processes and cases. Descriptive statistics, nonparametric methods, and inferential concept ...

The annual commissions earned by sales representatives of

The annual commissions earned by sales representatives of Machine Products, Inc. a manufacturer of light machinery, follow the normal probability distribution.  The mean yearly amount earned is $40,000 and the standard d ...

Linear regression and the fitting-lineexercise 1 the

Linear Regression and the "fitting-line" Exercise 1: The following table shows how many weeks six persons have worked at an automobile inspection station and the number of cars each one inspected between 3 p.m. and 5 p.m ...

An analyst from an energy research institute in california

An analyst from an energy research institute in California wishes to precisely estimate the 99% confidence interval for the average price of unleaded gasoline in the state. In particular, she does not want the sample mea ...

1 what are the most important threats to validity that

1. What are the most important threats to validity that occur in quasi experimental research designs when the research is conducted over a period of time? What techniques can be used to minimize these potential interpret ...

Consider the following system of preferences recall that

Consider the following system of preferences (recall that the preferences of the women appear in the lower right side of each cell (read vertically) and the preferences of the men appear on the upper left side (read hori ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro