Question

A insurance office keeps track of the number of car insurance claims filed each day. Based on the data collected, it determines that the following probability distribution applies: Number of Claims Probability 0 .25 1 .15 2 .25 3 .25 4 .10 a. What is the expected number of new claims filed each day

Answer 1

The expected number of new claims filed each day is 1.8.

Explanation:

We are given the following probability distribution:

`P(X = 0) = 0.25`

`P(X = 1) = 0.15`

`P(X = 2) = 0.25`

`P(X = 3) = 0.25`

`P(X = 4) = 0.1`

a. What is the expected number of new claims filed each day

Multiplication of each outcome by its probability, so:

`E(X) = 0*0.25 + 1*0.15 + 2*0.25 + 3*0.25 + 4*0.1 = 1.8`

The expected number of new claims filed each day is 1.8.