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Probability Question Help

  1. Oct 17, 2011 #1
    Can someone please help me out with this problem.

    1. In order to determine insurance premiums, suppose car insurance company classifies policyholders into 1 of 4 classes: excellent risks, good risks, average risks, and bad risks. Record probability will be excellent risk involved in car accident over 1 year span is 0.02, and then 0.05, 0.14 and 0.32 respectively for good, average and bad risk. Of its policy holders, 8% are classified as excellent risks, 16% are classified as good rsiks, and 62% are classified as average risks. You may assume car accidents are independent events.

    A) What proportion of all polciyholders are involved in a car accident within a given one year period? Explictly define all events

    B) If policyholder did not get into car accident during 2010, what is the probability they are classified as

    I) Excellent risk
    II) Good risk
    III) Average risk
    IV) Bad riks

    Thanks.
     
  2. jcsd
  3. Oct 18, 2011 #2

    This is a good starting point. What are your events?

    EDIT: Oh and welcome to PF!
     
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