Question

If an insurance company has 10000 policies, and each has 0.1 probability of making a claim, what is the standard deviation of the fraction of policies which result in a claim?

Answer 1

Answer:

Answer:

0.003

Step-by-step explanation:

Since each of the policy have the same chance of success, then it follows a binomial distribution (only two outcome; success or failure).

α = √(p(1-p)/n) = √ (0.1 ( 1-0.1)/ 10000) = √ 0.000009 = 0.003

where p = 0.1, α = standard deviation

Read more on Brainly.com - https://brainly.com/question/14472910#readmore

Answer 2

Standard deviation α = 0.003

Explanation:

Given:

Number of insurance policy = 10,000

Probability of making a claim = 0.1

Find:

Standard deviation

Computation:

Standard deviation α = √[p(1-p)/n]

Standard deviation α = √[0.1 ( 1-0.1)/10,000]

Standard deviation α = √0.000009

Standard deviation α = 0.003

Learn more:

https://brainly.in/question/2579073