A company buys a policy to insure revenue when major snowstorms shut down its business. The policy pays nothing for the first major snowstorm in a year but pays $ 10,000 for each major snowstorm after the first in a year.
Find the mean amount this policy will pay for a year if the number of major snowstorms in a year follows a Poisson distribution with a mean of 1.5. Hint: Let Y = the Poisson random variable and find the mean of X when X = 0 for Y = 0 or 1 and
X = 10,000( Y – 1 ) for Y ≥ 2.

Question

A company buys a policy to insure revenue when major snowstorms shut down its business.  The policy pays nothing for the first major snowstorm in a year but pays $ 10,000 for each major snowstorm after the first in a year.
	Find the mean amount this policy will pay for a year if the number of major snowstorms in a year follows a Poisson distribution with a mean of  1.5.  Hint:  Let  Y  =  the Poisson random variable and find the mean of   X  when   X  =  0  for  Y  =  0  or  1  and  
X  = 10,000( Y – 1 )  for  Y  ≥  2.