Solution

Problem # 4.8 Solution

l
ia
er
Let 𝑋 be the random variable that denotes what claim the insurance agent has to pay

at
Therefore, 𝑋 = 0, denotes no claim needs to be paid

M
𝑋 = 1, denotes 1 claim needs to be paid

2 e
-2 urs
𝑋 = 2, denotes 2 claims need to be paid

20 o
Hence, the random variable 𝑋 ∈ 𝐵, where 𝐵 = {0,1,2}

D IC
Probability of 2 insurance claims is 𝑃 𝑋 = 2 = 0.05 × 0.1 = 0.005

M LR
Probability of 1 insurance claim is 𝑃 𝑋 = 1 = 0.05 × 0.9 + 0.95 × 0.1 = 0.140

,B X
(Either insurance claim for first client and no claim for second client or insurance claim for second client and no claim

T1 of
Q rt
for first client) Pa

Shounak Basak
10/2/2020
PODS Area, XLRI – Xavier School of Management
97
Solution
Problem # 4.8 Solution

l
ia
Let 𝑋 be the random variable that denotes what claim the insurance agent has to pay

er
Therefore, 𝑋 = 0, denotes no claim needs to be paid

at
M
𝑋 = 1, denotes 1 claim needs to be paid

2 e
𝑋 = 2, denotes 2 claims need to be paid

-2 urs
Hence, the random variable 𝑋 ∈ 𝐵, where 𝐵 = {0,1,2}

20 o
D IC
Probability of 2 insurance claims is 𝑃 𝑋 = 2 = 0.05 × 0.1 = 0.005

M LR
Probability of 1 insurance claim is 𝑃 𝑋 = 1 = 0.05 × 0.9 + 0.95 × 0.1 = 0.140

,B X
(Either insurance claim for first client and no claim for second client or insurance claim for second client and no claim

T1 of
for first client)
Q rt
Probability of 0 insurance claims is 𝑃 𝑋 = 0 = 0.95 × 0.9 = 0.855
Pa

Shounak Basak
10/2/2020
PODS Area, XLRI – Xavier School of Management
98
Solution
Problem # 4.8 Solution

Let 𝑋 be the random variable that denotes what claim the insurance agent has to pay
Therefore, 𝑋 = 0, denotes no claim needs to be paid

l
ia
𝑋 = 1, denotes 1 claim needs to be paid

er
𝑋 = 2, denotes 2 claims need to be paid

at
M
Hence, the random variable 𝑋 ∈ 𝐵, where 𝐵 = {0,1,2}

2 e
Probability of 2 insurance claims is 𝑃 𝑋 = 2 = 0.05 × 0.1 = 0.005

-2 urs
Probability of 1 insurance claim is 𝑃 𝑋 = 1 = 0.05 × 0.9 + 0.95 × 0.1 = 0.140

20 o
D IC
(Either insurance claim for first client and no claim for second client or insurance claim for second client and no claim

M LR
for first client)

,B X
Probability of 0 insurance claims is 𝑃 𝑋 = 0 = 0.95 × 0.9 = 0.855

T1 of
The distribution is summarized as follows:
𝑃 𝑋 = 0 = 0.855
Q rt
Pa
𝑃 𝑋 = 1 = 0.140
𝑃 𝑋 = 2 = 0.005

Shounak Basak
10/2/2020
PODS Area, XLRI – Xavier School of Management
99
Solution
Problem # 4.8 Solution

The distribution is summarized as follows:

𝑃 𝑋 = 0 = 0.855

l
ia
𝑃 𝑋 = 1 = 0.140

er
𝑃 𝑋 = 2 = 0.005

at
M
2 e
-2 urs
Distribution

20 o
D IC
0.9

M LR
0.8

,B X
0.7

T1 of
0.6

Q rt
0.5
Pa
0.4

0.3

0.2

0.1

0
0 1 2

Shounak Basak
10/2/2020
PODS Area, XLRI – Xavier School of Management
100
Problem
Problem # 4.9

l
ia
er
at
Let 4 balls be drawn from an urn that contains 20 balls numbered through 1 to 20. Out of the 4 balls drawn, let the

M
largest number of the ball be marked as the random variable. What is the range of the random variable?

2 e
-2 urs
20 o
D IC
M LR
,B X
T1 of
Q rt
Pa

Shounak Basak
10/2/2020
PODS Area, XLRI – Xavier School of Management
101
Solution
Problem # 4.9 Solution

l
ia
Let 𝑋 be the random variable that represents the value of the largest ball that is drawn from the urn

er
at
M
2 e
-2 urs
20 o
D IC
M LR
,B X
T1 of
Q rt
Pa

Shounak Basak
10/2/2020
PODS Area, XLRI – Xavier School of Management
102
Solution
Problem # 4.9 Solution

Let 𝑋 be the random variable that represents the value of the largest ball that is drawn from the urn

l
ia
er
As 4 balls are drawn, the largest value of the ball will always be at least 4

at
M
2 e
-2 urs
20 o
D IC
M LR
,B X
T1 of
Q rt
Pa

Shounak Basak
10/2/2020
PODS Area, XLRI – Xavier School of Management
103
Solution
Problem # 4.9 Solution

Let 𝑋 be the random variable that represents the value of the largest ball that is drawn from the urn

l
ia
As 4 balls are drawn, the largest value of the ball will always be at least 4

er
Therefore, 𝑋 ∈ {4,5,6, … , 20}

at
M
2 e
-2 urs
20 o
D IC
M LR
,B X
T1 of
Q rt
Pa

Shounak Basak
10/2/2020
PODS Area, XLRI – Xavier School of Management
104