The distribution of loss due to Öre damage to a ware-house is given bykPk00:
8500?
1000?
10000
0:0850000
0:02100000 0:01
Insurance company charges $2000 premium for a yearly policy in order to break even.
a) Determine the missing probabilities of loss in the table.
b) Calculate the probability of loss P(k$1000)
c) Calculate the probability of loss P(k$1000)(both exactly and approximately via Markovís inequality)
2)An insurance policy pays an individual 100 per day for the Örst 4 days of hospitalization and 50 per day for each day of hospi-talization thereafter. The number of days of hospitalization,X, is a discrete random variable with probability function p(X=k) =10
