An insurance company has the following types of insureds: Type A: high risk insureds with a...

An insurance company has the following types of insureds:

Type A: high risk insureds with a mean loss of 3,000 and a standard deviation of 10.
Type B: low risk insureds with a mean loss of 1,000 and a standard deviation of 5.

You are given that 40% of the insureds are high risk.

Determine the variance of the amount of loss that the insureds incur.

a) 25

b) 36

c) 55

d) 360,655

e) 960,055

Solutions

Expert Solution

orchestra answered 1 year ago

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