Consider the following data on new customers for AJ Auto Insurance, specifically
ID: 3382045 • Letter: C
Question
Consider the following data on new customers for AJ Auto Insurance, specifically the information of the risk level of the customer and the number of tickets they have had in the last year.
0
1
2 or more
Total
Low Risk
56
22
8
86
Medium Risk
18
40
12
70
High Risk
11
13
20
44
Total
85
75
40
200
If you choose a customer at random, then find the probability that the customer is
a. low risk.
b. low risk and had two or more tickets in the last year.
c. medium risk, given that the customer had zero tickets in the last year. (Points : 18)
0
1
2 or more
Total
Low Risk
56
22
8
86
Medium Risk
18
40
12
70
High Risk
11
13
20
44
Total
85
75
40
200
Explanation / Answer
a)
P( low risk ) = 86 / 220 = 0.3909
b)
P( low risk and 2 or more ) = 8 /200 = 0.04
c)
P( medium risk given that customer had 0 tickets ) = 70 / 85 = 0.8235
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