If an insurance company has 1 policies, and each has 0.1 probability of making a claim, what is the standard deviation of

6 answers
Question:

If an insurance company has 1 policies, and each has 0.1 probability of making a claim, what is the standard deviation of the fraction of policies which result in a claim?

Answers

0.003

Step-by-step explanation:

Since each of the policy have the same chance of success, then it follows a binomial distribution (only two outcome; success or failure).

α = √(p(1-p)/n) = √ (0.1 ( 1-0.1)/ 10000) = √ 0.000009 = 0.003

where p = 0.1, α = standard deviation.

S.D = +/- 0.003

The standard deviation of the fraction of policies which result in a claim is +/- 0.003

Step-by-step explanation:

Given;

Probability of making a claim p = 0.1

Number of company policies n = 10000

Standard deviation is the measure of how spread out numbers are.

S.D = √(p(1-p)/n)

Where,

p = 0.1

n = 10000

S.D = √(0.1(1-0.1)/10000)

S.D = √(0.1×0.9/10000)

S.D = √(0.000009)

S.D = +/- 0.003

0.003

Step-by-step explanation:

Since each of the policy have the same chance of success, then it follows a binomial distribution (only two outcome; success or failure).

α = √(p(1-p)/n) = √ (0.1 ( 1-0.1)/ 10000) = √ 0.000009 = 0.003

where p = 0.1, α = standard deviation

Read more on -

Standard deviation α = 0.003

Explanation:

Given:

Number of insurance policy = 10,000

Probability of making a claim = 0.1

Find:

Standard deviation

Computation:

Standard deviation α = √[p(1-p)/n]

Standard deviation α = √[0.1 ( 1-0.1)/10,000]

Standard deviation α = √0.000009

Standard deviation α = 0.003

Learn more:

(a) the volume of the cone is 20/3 in3

hence, option a is correct.

y -5 = (-1/4)(x + 8)

step-by-step explanation:

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