Exam P Practice Question 934
Study guide: Exam P-1
A company has 100 insureds. Each insured, independently of the others, is high-risk with probability 0.60 and low-risk with probability 0.40. A high-risk insured files a claim in a year with probability 0.20; a low-risk insured, with probability 0.10. No insured files more than one claim in a year, and given the risk types, insureds file claims independently. Let N be the total number of claims filed in a year.
Calculate the standard deviation of N.
- A) 3.41
- B) 3.56
- C) 3.67
- D) 3.76
- E) 3.87
Answer this question and see the worked solution