6.5 Suppose the average U.S. household spends $2,100 a year on all types of insurance. Suppose...

6.5 Suppose the average U.S. household spends $2,100 a year on all types of insurance. Suppose the ﬁgures are uniformly distributed between the values of $400 and $3,800. What are the standard deviation and the height of this distribution? What proportion of households spends more than $3,000 a year on insurance? More than $4,000? Between $700 and $1,500?

Solutions

Expert Solution

Let X denotes the spend on a randomly selected U.S. household.

X ~ Uniform(400, 3800)

The probability density function of X is

The standard deviation of this distribution

The proportion of households spends more than $3,000 a year on insurance

The proportion of households spends more than $4,000 a year on insurance

= 0 since X is uniformly distributed between the values of $400 and $3,800.

The proportion of households spends between $700 and $1,500 a year on insurance

orchestra answered 2 years ago

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