Homework Help is Here – Start Your Trial Now!
Math
Probability
An Insurance company has developed the following table to describe the distribution of automobile collision claims paid during the past year. Payment ($) 0 500 average 1,000 2,000 5,000 8,000 10,000 Probability 0.85 0.06 0.03 0.02 0.02 0.01 0.01 (a) Set up a table of intervals of random numbers ranging from 0 to 1 that can be used with the Excel VLOOKUP function to generate values for automobile collision claim payments. Lower End of Interval Upper End of Interval Payment($) 0 500 1,000 2,000 5,000 8,000 10,000 (b) Construct a simulation model to estimate the average claim payment amount (in $) and the standard deviation (In $) in the claim payment amounts. (Use at least 1,000 trials. Round your answers to two decimal places.) 12:05 PM

An Insurance company has developed the following table to describe the distribution of automobile collision claims paid during the past year. Payment ($) 0 500 average 1,000 2,000 5,000 8,000 10,000 Probability 0.85 0.06 0.03 0.02 0.02 0.01 0.01 (a) Set up a table of intervals of random numbers ranging from 0 to 1 that can be used with the Excel VLOOKUP function to generate values for automobile collision claim payments. Lower End of Interval Upper End of Interval Payment($) 0 500 1,000 2,000 5,000 8,000 10,000 (b) Construct a simulation model to estimate the average claim payment amount (in $) and the standard deviation (In $) in the claim payment amounts. (Use at least 1,000 trials. Round your answers to two decimal places.) 12:05 PM

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.5: Comparing Sets Of Data
Problem 3CYU
See similar textbooks
icon
Related questions
Question
An insurance company has developed the following table to describe the distribution of automobile collision claims pald during the past year. Payment ($) (b) 0 500 1,000 2,000 5,000 8,000 10,000 Probability 0.85 0.06 0.03 0.02 $ 0.02 0.01 (a) Set up a table of intervals of random numbers ranging from 0 to 1 that can be used with the Excel VLOOKUP function to generate values for automobile collision claim payments. 0.01 Lower End of Interval NICO Upper End of Interval Payment ($) 0 500 1,000 2,000 5,000 8,000 10,000 Construct a simulation model to estimate the average claim payment amount (in $) and the standard deviation (in $) in the claim payment amounts. (Use at least 1,000 trials. Round your answers to two decimal places.) average 12:05 PM
Transcribed Image Text:An insurance company has developed the following table to describe the distribution of automobile collision claims pald during the past year. Payment ($) (b) 0 500 1,000 2,000 5,000 8,000 10,000 Probability 0.85 0.06 0.03 0.02 $ 0.02 0.01 (a) Set up a table of intervals of random numbers ranging from 0 to 1 that can be used with the Excel VLOOKUP function to generate values for automobile collision claim payments. 0.01 Lower End of Interval NICO Upper End of Interval Payment ($) 0 500 1,000 2,000 5,000 8,000 10,000 Construct a simulation model to estimate the average claim payment amount (in $) and the standard deviation (in $) in the claim payment amounts. (Use at least 1,000 trials. Round your answers to two decimal places.) average 12:05 PM
(b) Construct a simulation model to estimate the average claim payment amount (in $) and the standard deviation (in $) in the claim payment amounts. (Use at least 1,000 trials. Round your answers to two decimal places.) average standard deviation $ $ .., X, represent possible values of X. Then, the mean (u) and √√(x₁ -μ)² x P(X = X₁) + ... + (x µ)² x P(X = X). Using these formulas, calculate (c) Let X be the discrete random variable representing the dollar value of an automobile collision claim payment. Let, X₁, X₂¹ standard deviation (o) of X can be computed as μ = x₁ x P(X = X₁) + + x₁ x P(X = X ), and o = Xn the mean and standard deviation (In $). (Round your standard deviation to two decimal places.) μ = $ 0 = $ Compare the values of sample mean and sample standard deviation In part (a) to the analytical calculation of the mean and standard deviation. How can we Improve the accuracy of the sample estimates from the simulation? We can use a different discrete distribution to generate our random variables. O We can decrease the number of simulation trials. We can gather our data from real world samples instead. We can increase the number of simulation trials. We can use a different continuous distribution to generate our random variables.
Transcribed Image Text:(b) Construct a simulation model to estimate the average claim payment amount (in $) and the standard deviation (in $) in the claim payment amounts. (Use at least 1,000 trials. Round your answers to two decimal places.) average standard deviation $ $ .., X, represent possible values of X. Then, the mean (u) and √√(x₁ -μ)² x P(X = X₁) + ... + (x µ)² x P(X = X). Using these formulas, calculate (c) Let X be the discrete random variable representing the dollar value of an automobile collision claim payment. Let, X₁, X₂¹ standard deviation (o) of X can be computed as μ = x₁ x P(X = X₁) + + x₁ x P(X = X ), and o = Xn the mean and standard deviation (In $). (Round your standard deviation to two decimal places.) μ = $ 0 = $ Compare the values of sample mean and sample standard deviation In part (a) to the analytical calculation of the mean and standard deviation. How can we Improve the accuracy of the sample estimates from the simulation? We can use a different discrete distribution to generate our random variables. O We can decrease the number of simulation trials. We can gather our data from real world samples instead. We can increase the number of simulation trials. We can use a different continuous distribution to generate our random variables.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
Glencoe Algebra 1, Student Edition, 9780079039897…
Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill
Holt Mcdougal Larson Pre-algebra: Student Edition…
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL
SEE MORE TEXTBOOKS