In: Statistics and Probability

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?

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

To determine the insurance premium of a car, an insurance
company considers the following determinants: the model of the car
, the age of the car, and the mileage of the car. Which of the
following is the dependent variable? Please explain why you
chose this answer to better understand why you chose it. I
believe it is A due to using the cars mileage and always determines
the premium of the bill. But then i believe it is C.insurance...

Write a program to determine the cost of an automobile insurance
premium, based on the driver's age and the number of accidents that
the driver has had.
The basic insurance charge is $500.There is a surcharge of
$100. if the driver is under 25 and an additional surcharge for
accidents:
No. of accidents
►
Accident Surcharge
1
►
25
2
►
25
3
►
75
4
►
75
5
►
100
6 or +
►
No assurance

Nationwide, the average salary of actuaries who achieve the
rank of Fellow is $150,000. An insurance executive wants to see how
this compares with Fellows within his company. He checks the
salaries of eight Fellows and finds the average salary to be
$155,875 with a standard deviation of $6664.13. Can he conclude
that the Fellows in his company make more than the national
average, using α = 0.05? Solve using the Traditional Method. Data
is also available in SPSS, HW5Q6.sav...

Actuaries use various parameters when evaluating the cost of a
life insurance policy. The variance of the life spans of a
population is one of the parameters used for the evaluation. Each
year, the actuaries at a particular insurance company randomly
sample 30 people who died during the year (with the samples chosen
independently from year to year) to see whether the variance of
life spans has changed. The life span data from this year and from
last year are...

1.
Continental Insurance is drafting a new type of insurance
policy. In drafting it, Continental must meet which of the
following?
federal statutory requirements for tort law
common law requirements for contracts
common law requirements for tort law
state statutory requirements for tort law
2.
Do creditors have an insurable interest in someone who owes them
money?
Yes.
Depends on the amount owed.
No.
Depends on whether the person is worth more dead than alive.

In calculating insurance premiums, the actuarially fair
insurance premium is the premium that results in a zero NPV for
both the insured and the insurer. As such, the present value of the
expected loss is the actuarially fair insurance premium. Suppose
your company wants to insure a building worth $245 million. The
probability of loss is 1.25 percent in one year, and the relevant
discount rate is 4 percent.
a. What is the actuarially fair insurance premium? (Do not round...

In calculating insurance premiums, the actuarially fair
insurance premium is the premium that results in a zero NPV for
both the insured and the insurer. As such, the present value of the
expected loss is the actuarially fair insurance premium. Suppose
your company wants to insure a building worth $460 million. The
probability of loss is 1.30 percent in one year, and the relevant
discount rate is 2.1 percent.
a.
What is the actuarially fair insurance premium? (Do not
round...

In calculating insurance premiums, the actuarially fair
insurance premium is the premium that results in a zero NPV for
both the insured and the insurer. As such, the present value of the
expected loss is the actuarially fair insurance premium. Suppose
your company wants to insure a building worth $295 million. The
probability of loss is 1.28 percent in one year, and the relevant
discount rate is 3.2 percent.
a.
What is the actuarially fair insurance premium? (Enter
your...

In calculating insurance premiums, the actuarially fair
insurance premium is the premium that results in a zero NPV for
both the insured and the insurer. As such, the present value of the
expected loss is the actuarially fair insurance premium. Suppose
your company wants to insure a building worth $280 million. The
probability of loss is 1.44 percent in one year, and the relevant
discount rate is 3.6 percent.
a.
What is the actuarially fair insurance premium? (Enter
your...

An insurance company charges an annual premium of $75 for a
$200,000 insurance policy against a house burning down. If the
(empirical) probability that a house burns down in a given year is
.0003, what is the expected value of the policy to the insurance
company?

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