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?

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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

Answer 2

Hey Mate !

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.

Hope it Helps U !

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