Question

Last year, 20% of all claims were for weather-related damage (excluding floods), with an average weather-related damage claim being $6,500. What is the expected value (loss or gain) per weather-related claim to Acasa for every customer who chooses plan B?
Plan B has a $1,200 yearly premium with a $1,000 deductible.
-$1,380
-$180
$100
$1,180

Answer 1

1,180

Answer 2

ur wrong thankks tho

Answer 3

whoops sorry

Answer 4

@mathmale

Answer 5

i need help mathmale if u could please

Answer 6

@mathmate

Answer 7

brb

Answer 8

Have you worked on problems related to expected values so fr?

Answer 9

Expected value is obtained by the summation:
\(\Sigma~ X_i~P(X_i) \)

Answer 10

Here X represents the revenue (premiums) and payout.
Do not forget about the $1000 deductible, so for every claim, the payout is only $(6500-1000)=$5500

Answer 11

@jcr268
I'll leave that to you to work on it.
If you have questions, let me know.

Answer 12

thank you . so E*X, P * (x)??

Answer 13

Yes, \(E(X)=\Sigma X_i P(X_i)\)
here you have two different values each for Xi and Pi. The products should be added, and it should match one of the answers.

Answer 14

im confused can u put the full equation out so ik and ill solve it, just this time, so i can know what for what @Mathstudent55

Answer 15

ok

Answer 16

Insurance premium, X1 = 1200 (receivable from everyone)
so probability P(X1)=1, and
X1P(X1)=1200

Claims, X2=$6500-1000 deductible = -$5500 (pay)
P(X2)=0.20 (only 20% of subscribers claim)
X2*P(X2)=5500*0.2 = -1100

So
\(Ex(X)=\Sigma X_i*P(X_i)=X_1P(X_1)+X_2P(X_2)=?\)