SOA Exam FAM Sample Question 24
Study guide: Exam FAM
You own a light bulb factory. Your workforce is a bit clumsy – they keep dropping boxes of light bulbs. The boxes have varying numbers of light bulbs in them, and when dropped, the entire box is destroyed.
You are given:
- Expected number of boxes dropped per month: 50
- Variance of the number of boxes dropped per month: 100
- Expected value per box: 200
- Variance of the value per box: 400
You pay your employees a bonus if the value of light bulbs destroyed in a month is less than 8000.
Assuming independence and using the normal approximation, calculate the probability that you will pay your employees a bonus next month.
- A) 0.16
- B) 0.19
- C) 0.23
- D) 0.27
- E) 0.31
Answer this question and see the worked solution