Question

1. You are considering buying a raffle ticket for $10. One thousand tickets are being sold and the winner gets $6,000. The winning number will be randomly drawn, so your probability of winning is .001 (=0.1%). If you win, the net benefit to you is $5,990 (the $6,000 winnings minus the $10 you paid for the ticket). If you lose, the net benefit is minus $10 (the cost of the ticket).

2. Your car insurance company has learned, from years of experience, that the amount they have to pay for claims arising from drivers hitting a deer follows the Normal Distribution with a mean of $4,000 and a standard deviation of $500.

What percentage of the deer claims this year do we expect to fall between $4,000 and    $5, 000?

What is the probability that the next deer claim we get will fall between $3,500 and         $4,000?

Answer 1