SOA Exam P Sample Question 398
Study guide: Exam P-1
Ten percent of homeowners in a certain city are classified as high-risk, and ninety percent are classified as low-risk. Each homeowner's classification remains unchanged over the next four years.
In any given year, each high-risk homeowner has probability 0.80 of experiencing no fires, and each low-risk homeowner has probability 0.99 of experiencing no fires. For each homeowner, the numbers of fires in different years are mutually independent.
A randomly chosen homeowner experiences no fires in the first and second years.
Calculate the probability that this homeowner will experience no fires in the third and fourth years.
- A)
0.9055 - B)
0.9324 - C)
0.9461 - D)
0.9548 - E)
0.9571
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