What Premium Would An Insurance Company Charge To Break Even On A One-Year $1 Million

1. The probability that a 26-year-old white male will live another year is .99867.

 

What premium would an insurance company charge to break even on a one-year $1 million term life insurance policy?

 

Break even    $

 

2.

As a birthday gift, you are mailing a new personal digital assistant (PDA) to your cousin in Toledo. The PDA cost $456. There is a 5 percent chance it will be lost or damaged in the mail. Is it worth $4 to insure the mailing?

 

No Yes

 

 

3.

In a major league baseball game, the average is 1.1 broken bat per game.

 

(a)        Find the probability of no broken bats in a game. (Round your answer to 4 decimal places.)

 

Probability

 

(b)        Find the probability of at least 2 broken bats in a game. (Round your answer to 4 decimal places.)

 

Probability

 

 

 

4.

Historically, 12 percent of a mail-order firm’s repeat charge-account customers have an incorrect current address in the firm’s computer database.

 

The number of customers out of 19 who have an incorrect address in the database is a binomial random variable with n = 19 and π = 0.12.

 

 

(a)

What is the probability that none of the next 19 repeat customers who call will have an incorrect address? (Round your answer to 4 decimal places.)

 

Probability

 

(b)

What is the probability that eight customer who call will have an incorrect address? (Round your answer to 4 decimal places.)

 

Probability

 

(c)

What is the probability that nine customers who call will have an incorrect address? (Round your answer to 4 decimal places.)

 

Probability

References eBook & Resources WorksheetSection Exercise 6-24 Part c

 

 

 

(d)

What is the probability that fewer than ten customers who call will have an incorrect address? (Round your answer to 4 decimal places.)

 

Probability

 

5.

J.D. Power and Associates says that 70 percent of car buyers now use the Internet for research and price comparisons.

 

(a)

Find the probability that in a sample of 6 car buyers, all 6 will use the Internet. (Round your answer to 4 decimal places.)

 

Probability

 

(b)

Find the probability that in a sample of 6 car buyers, at least 3 will use the Internet. (Round your answer to 4 decimal places.)

 

Probability

 

(c)

Find the probability that in a sample of 6 car buyers, more than 2 will use the Internet. (Round your answer to 4 decimal places.)

 

Probability

 

(d)

Find the mean and standard deviation of the probability distribution. (Round your Mean value to 2 decimal places and Standard deviation to 4 decimal places.)

 

 

Mean

Standard deviation

 

6.

At an outpatient mental health clinic, appointment cancellations occur at a mean rate of 3.2 per day on a typical Wednesday. Let X be the number of cancellations on a particular Wednesday.

 

(a)        Justify the use of the Poisson model.

 

 

Cancellations are not independent

Cancellations are independent and similar to arrivals

Most likely cancellations arrive independently

 

(b)

What is the probability that no cancellations will occur on a particular Wednesday? (Round your answer to 4 decimal places.)

 

Probability

 

(c)

What is the probability that one cancellations will occur on a particular wednesday? (Round your answer to 4 decimal places.)

 

Probability

 

(d)

What is the probability that more than four cancellations will occur on a particular wednesday? (Round your answer to 4 decimal places.)

 

Probability

 

(e)

What is the probability that six or more cancellations will occur on a particular wednesday? (Round your answer to 4 decimal places.)

 

Probability

 

7.

 

 

A medical laboratory receives 30 blood specimens to check for HIV. Ten actually contain HIV. A worker is accidentally exposed to five specimens.

(a)        What is the probability that none contained HIV? (Round your answer to 4 decimal places.)

 

Probability

 

(b)        Fewer than three? (Round your answer to 4 decimal places.)

 

Probability

 

 

(c)        At least two? (Round your answer to 4 decimal places.)

 

Probability