Question

Risky drivers: An automobile insurance company divides customers into three categories: good risks, medium risks, and poor risks. Assume that of a total of 11,210 customers, 7761 are good risks, 2499 are medium risks, and 950 are poor risks. As part of an audit, one customer is chosen at random. Round youranswers to four decimal places if necessary.Part 1 of 2(a) What is the probability that the customer is a good risk?The probability that the customer is a good risk isXŚPart: 1/2Part 2 of 2(b) What is the probability that the customer is not a poor risk?The probability that the customer is not a poor risk isXŚ

Answer 1

Given data:

Total: 11210

7761 good risk

2499 medium risk

950 poor risk

a) Probability of choose a customer with good risk (gr):

`P(gr)=\frac{#customer\text{ }gr}{#total}=(7761)/(11210)=0.6923`

Th eprobability that the customer is a good risk is 0.6923

b) Probability that a customer is not a poor risk (pr):

`P(no\text{ }pr)=1-P(pr)=1-\frac{#custormer\text{ }pr}{#total}=1-(950)/(11210)=(11210-950)/(11210)=(10260)/(11210)=0.9153`

The probability that the customer is not a poor risk is 0.9153