An auto insurance company has 10,000 policyholders.

Each policyholder is classified as (i) Young or old (ii) Male or female (iii) Married or single Of these policyholders, 3000 are young, 4600 are male, and 7000 are married. The policyholders can also be classified as 1320 young males, 3010 married males, and 1400 young married persons. Finally, 600 of the policyholders are young married males. How many of the companys policyholders are young, female and single? (880)

In modeling the number of claims filed by an individual under an automobile policy during a three-year period, an actuary makes the simplifying assumption that for all integers

n 0 , pn +1 =

1 pn , where pn represents the probability that the policyholder files n claims 5

during the period. Under this assumption, what is the probability that a policyholder files more than one claim during the period? (0.04)

An actuary has discovered that policyholders are three times as likely to file two claims as to file four claims. If the number of claims has a Poisson distribution, what is the variance of the number of claims filed? (2)

The probability that a randomly chosen male has a circulation problem is 0.25. Males who have a circulation problem are twice as likely to be smokers as those who do not have a circulation problem. What is the conditional probability that a male has a circulation problem, given that he is a smoker? (0.4)

An actuary has discovered that policyholders are three times as likely to file two claims as to file four claims. If the number of claims filed has a Poisson distribution, what is the variance of the number of claims filed. (2)

The loss due to a fire in a commercial building is modeled by a random variable X with density function

0.005(20 x) 0 < x < 20 f ( x) = otherwise 0

The lifetime of a printer costing 200 is exponentially distributed with mean 2 years. The manufacturer agrees to pay a full refund to a buyer if the printer fails during the first year following its purchase, and a one-half refund if it fails during the second year. If the manufacturer sells 100 printers, how much should it expect to pay in refunds? (10256)

A company takes out an insurance policy to cover accidents that occur at its manufacturing plant. The probability that one or more accidents will occur during any given month is

3 . 5

The number of accidents that occur in any given month is independent of the number of accidents that occur in all other months. Calculate the probability that there will be at least four months in which no accidents occur before the fourth month in which at least one accident occurs. (0.29)

An insurance policy pays 100 per day for up to 3 days of hospitalization and 50 per day for each day of hospitalization thereafter. The number of days of hospitalization, X , is a discrete random variable with probability function

6 k P ( X = k ) = 15 0

for k = 1, 2,3, 4, 5 otherwise

Determine the expected payment for hospitalization under this policy.

A continuous random variable X takes any value in the whole real line with the density function

f ( x) = k exp(2 x )
Find the constant k (1)

for x (, )

An insurance policy on an electrical device pays a benefit of 4000 if the device fails during the first year. The amount of the benefit decreases by 1000 each successive year until it reaches 0. If the device has not failed by the beginning of any given year, the probability of failure during that year is 0.4. What is the expected benefit under this policy? (2694)

The time to failure of a component in an electronic device has an exponential distribution with a median of four hours. Calculate the probability that the component will work without failing for at least five hours. (0.42)

Claims filed under auto insurance policies follow a normal distribution with mean 19,400 and standard deviation 5,000 What is the probability that the average of 25 randomly selected claims exceeds 20,000? (0.2743)

A public health researcher examines the medical records of a group of 937 men who died in 1999 and discovers that 210 of the men died from causes related to heart disease. Moreover, 312 of the 937 men had at least one parent who suffered from heart disease, and, of these 312 men, 102 died from causes related to heart disease. Determine the probability that a man randomly selected from this group died of causes related to heart disease, given that neither of this parents suffered from heart disease. (0.173)

A doctor is studying the relationship between blood pressure and heartbeat abnormalities in her patients. She tests a random sample of her patients and notes their blood pressures (high, low, or normal) and their heartbeats (regular or irregular). She finds that: (i) 14% have high blood pressure (ii) 22% have low blood pressure (iii) 15% have an irregular heartbeat (iv) Of those with an irregular heartbeat, one-third have high blood pressure. (v) Of those with normal blood pressure, one-eighth have an irregular heartbeat. What portion of the patients selected have a regular heartbeat and low blood pressure? (20%)

An insurance company determines that N , the number of claims received in a week, is a random variable with P ( N = n) =

1 , where n 0 . The company also determines that 2n +1

the number of claims received in a given week is independent of the number of claims received in any other week. Determine the probability that exactly seven claims will be received during a given two-week period. (1/64)

An insurance company pays hospital claims. The number of claims that include emergency room or operating room charges is 85% of the total number of claims. The number of claims that do not include emergency room charges is 25% of the total number of claims. The occurrence of emergency room charges is independent of the occurrence of operating room charges on hospital claims. Calculate the probability that a claim submitted to the insurance company includes operating room charges. (0.40)

An insurance company issues life insurance policies in three separate categories: standard, preferred, and ultra-preferred. Of the companys policyholders, 50% are standard, 40% are preferred, and 10% are ultra-preferred. Each standard policyholder has probability 0.010 of dying in the next year, each preferred policyholders has probability 0.005 of dying in the next year, and each ultra-preferred policyholder has probability 0.001 of dying in the next year. A policyholder dies in the next year. What is the probability that the deceased policyholder was ultra-preferred? (0.0141)

Upon arrival at a hospitals emergency room, patients are categorized according to their condition as critical, serious, or stable. In the past year: (i) 10% of the emergency room patients were critical (ii) 30% of the emergency room patients were serious (iii) The rest of the emergency room patients were stable (iv) 40% of the critical patients died (v) 10% of the serious patients died (vi) 1% of the stable patients died. Given that a patient survived, what is the probability that the patient was categorized as serious upon arrival? (0.29)

A health study tracked a group of persons for five years. At the beginning of the study, 20% were classified as heavy smokers, 30% as light smokers, and 50% as nonsmokers. Result of the study showed that light smokers were twice as likely as nonsmokers to die during the five-year study, but only half as likely as heavy smokers. A randomly selected participant from the study died over the five-year period. Calculate the probability that the participant was a heavy smoker (0.42)