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

orchestra answered 1 year ago

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