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    The document describes an insurance policy that pays a company $10,000 for each major snowstorm after the first one in a year that shuts down business. The number of such snowstorms per year has a Poisson distribution with a mean of 1.5. The expected amount paid out under this policy per year is $7,231.

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    The document describes an insurance policy that pays a company $10,000 for each major snowstorm after the first one in a year that shuts down business. The number of such snowstorms per year has a Poisson distribution with a mean of 1.5. The expected amount paid out under this policy per year is $7,231.

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    © All Rights Reserved
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    3 views1 page

    Untitled

    Uploaded by

    Ngọc Lê
    The document describes an insurance policy that pays a company $10,000 for each major snowstorm after the first one in a year that shuts down business. The number of such snowstorms per year has a Poisson distribution with a mean of 1.5. The expected amount paid out under this policy per year is $7,231.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    (A) 85

    (B) 163

    (C) 168

    (D) 213

    (E) 255

    50. A company buys a policy to insure its revenue in the event of major snowstorms that shut

    down business. The policy pays nothing for the first such snowstorm of the year and

    10,000 for each one thereafter, until the end of the year. The number of major

    snowstorms per year that shut down business is assumed to have a Poisson distribution

    with mean 1.5 .

    What is the expected amount paid to the company under this policy during a one-year

    period?

    (A) 2,769

    (B) 5,000

    (C) 7,231

    (D) 8,347

    (E) 10,578

    35 of 102

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