- #1

shawnz1102

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An insurance company insures a person's antique coin collection worth $20,000 for an annual premium of $300. If the company figures that the probability of the collection being stolen is 0.002, what will be the company's expected profit?

For this problem, here's what I got:

x...300...?

p(x)...0.998...0.002

I can't seem to figure out what to put in the ? (loss). Maybe i just don't understand the wording of the problem... I mean, it's saying that if the antique

**does**get lost, the company would pay the insurer $20,000? If not, then there's really no way of figuring out what the company's loss is since it doesn't say it...

**The answer is: $260.**

If a person rolls doubles when he tosses two dice, he wins $5. For the game to be fair, how much should the person pay to play the game?

For this problem, I have:

x....5 ...?

p(x)...1/12...11/12

The reason I got 1/12 for the winning side is because there's 3 chances of getting doubles (rolling a 4 & 6, 5 & 6, and 6 & 6), and the total possible outcome is 36 (6 x 6)

And for the 11/12, I just subtracted 12/12 from 1/12. And this is as far as I got...

**The answer is: $0.83**Any help would be appreciated. Thanks in advance!