Question

The probabilities of the following three possibilities to a house is given below: Event Loss Probability...

The probabilities of the following three possibilities to a house is given below:

Event Loss Probability

No Loss 0 90%

Small Loss 5,000 8%

Large Loss 50,000 2%

a. Calculate the expected value and standard deviation if the owner does not have any pooling

b. Illustrate the expected value/standard deviation if two owners of similar properties pool their losses

c. What is the expected value and standard deviation if 1,000 owners decided to pool their losses

Math   Statistics-And-Probability   
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