Answer:
a). 0.294
b) 0.11
Step-by-step explanation:
From the given information:
the probability of the low risk = 0.60
the probability of the high risk = 0.40
let
represent no claim
let
represent 1 claim
let
represent 2 claim :
For low risk;
so,
= (0.80 * 0.60 = 0.48),
= (0.15* 0.60=0.09),
= (0.05 * 0.60=0.03)
For high risk:
= (0.50 * 0.40 = 0.2),
= (0.30 * 0.40 = 0.12) ,
= ( 0.20 * 0.40 = 0.08)
Therefore:
a), the probability that a randomly selected policyholder is high-risk and filed no claims can be computed as:




b) What is the probability that a randomly selected policyholder filed two claims?
the probability that a randomly selected policyholder be filled with two claims = 0.03 + 0.08
= 0.11