the customer's expected value of the cellphone insurance policy is -$38.64. (Option C)
Step-by-step explanation:
Based on the data given, 585/5000 or 11.7% of the total number policies have claims. This means, 100% - 11.7% = 88.3% have not claimed their cellphone insurance.
In the chart, we are focusing on the customer's end because the question is asking for the customer's expected value↓
In the chart, if the customer has no claims, then he losses his $48. However, if he has claims, he gains $32 since $80 - 48 = $32. Also, based on the data given by the company, 88.30% have no claims and only 11.7% of the customers have claims.
To get the expected value, we will multiply -48 and 88.3% as well as 32 and 11.7%. 48 is negative because it indicates a loss.
We are given with an isosceles triangle having a vertex on the curve given y =<span>27-x^2</span> . The area of the triangle, A= xy = x (27-x^2) A' = 27-x^2-2x^2 = 0 x = 3 Amax = 3(27-9) = 54 units2