1. Compute the mean and variance of the following probability distribution. (Rou

Question

1. Compute the mean and variance of the following probability distribution. (Round your answers to 2 decimal places.)

Mean: _____
Variance: ______

2. Sweetwater & Associates write weekend trip insurance at a very nominal charge. Records show that the probability that a motorist will have an accident during the weekend and file a claim is 0.0007. Suppose they wrote 503 policies for the coming weekend, what is the probability that exactly two claims will be filed?

a) .0260

b) .0436

c) .0340

d) .0247

1. Compute the mean and variance of the following probability distribution. (Round your answers to 2 decimal places.)

Explanation / Answer

1) Mean, E(X) = 2 * 0.1 + 6 * 0.2 + 10 * 0.25 + 14 * 0.45 = 10.2

E(X2) = 22 * 0.1 + 62 * 0.2 + 102 * 0.25 + 142 * 0.45 = 120.8

Var(X) = E(X2) - (E(X))2 = 120.8 - 10.22 = 16.76

2) probability that exactly two claims will be filed = 503C2 * 0.00072 * (1 - 0.0007)501 = 0.0436

Option-B) 0.0436

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