2. An deductibles for the homeown and are categorized as either High, Medium or
ID: 3354134 • Letter: 2
Question
2. An deductibles for the homeown and are categorized as either High, Medium or Low. The deductibles for the auto policies are sold at one of three levels: $250, $500 or $1,000. The table below gives the distribution of sales of all those who purchased both policies in the last year. For example, the proportion of people insurance company sells homeowners' insurance and automobile insurance. The ers' policies are determined in relation to the price of each house who purchased both a homeowners policy with a Low deductible and an automobile policy with a $250 deductible is 0.06 or 6%. Auto Policy Deductibles $250 Homeowners' Policy Deductibles Low 0.06 Medium 0.09 0.20 High 0.03 0.10 0.15 S500 017 $1,000 0.05 0.15 Suppose an individual who purchased both policies is chosen at random from the company's a. (5 points) What is the likelihood that the individual selected purchased an automobile policy with a $500 deductible? b. (5 points) Given that the individual selected purchased a homeowners' policy with the Low deductible, what is the chance that the person also purchased the $1,000 auto policy deductible?Explanation / Answer
a)P(500 deductible)=0.17+0.20+0.10=0.47
b)P(low)=0.06+0.17+0.05=0.38
P(1000|low)=P(low,1000)/P(low)
=0.05/0.38
=0.13
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