Question

In: Statistics and Probability

Actuaries at an insurance company must determine a premium for the type of insurance. A random...

Actuaries at an insurance company must determine a premium for the type of insurance. A random sample of 40 potential purchasers of this type of insurance were foundto have suffered the following values of losses (in dollars) during the past year. These losses would have been covered by the insurance if it were not available.

100

32

0

0

470

50

0

14589

212

93

0

0

1127

421

0

87

135

420

0

250

12

0

309

0

177

295

501

0

143

0

167

398

54

0

141

0

3709

122

0

0

a. Find the mean, median, and mode of these 40 losses?

b. Which of the mean, median or mode is largest?

c. Draw a box-and-whisker plot for these data, and describe the skewness if any

d. Which measure of central tendency should the actuaries use to determine the premium for this insurance?

Solutions

Expert Solution

here

Mode=14589

Therefore mode is largest

Median is a measure of central tendency should be actuaries use to determine the premium of this insurance


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