CAS Exam MAS-I Fall 2019, Question 3
Study guide: Exam MAS-I
You are given the following information about an online retailer:
- Orders are placed on the website according to a homogeneous Poisson process with mean 50 per hour
- The number of items purchased in each order is independent and has the following distribution:
| Number of Items | Probability |
|---|---|
| 1 | 0.50 |
| 2 | 0.40 |
| 3 | 0.08 |
| 4 | 0.02 |
Calculate the variance of the total number of items purchased in a four-hour period.
- A) Less than 100
- B) At least 100, but less than 300
- C) At least 300, but less than 500
- D) At least 500, but less than 700
- E) At least 700
Answer this question and see the worked solution