Respuesta :
The question is incomplete! Complete question along with answer and step by step explanation is provided below.
Question:
An individual who has automobile insurance from a certain company is randomly selected. Let Y be the number of moving violations for which the individual was cited during the last 3 years. The pmf of Y is:
y | P(Y)
0 | 0.50
1 | 0.20
2 | 0.25
3 | 0.05
Compute E(Y)
Suppose an individual with Y violations incurs a surcharge of $100Y2. Calculate the expected amount of the surcharge.
Answer:
The expected value E(Y) is
[tex]E(Y) = 0.85[/tex]
The expected amount of the surcharge is
[tex]E(100Y^2) = 165[/tex]
Step-by-step explanation:
Let Y be the number of moving violations for which the individual was cited during the last 3 years.
The given probability mass function (pmf) of Y is
y | P(Y)
0 | 0.50
1 | 0.20
2 | 0.25
3 | 0.05
Compute E(Y)
The expected value E(Y) is given by
[tex]E(Y) = \sum Y \cdot P(Y) \\\\E(Y) = 0 \cdot 0.50 + 1 \cdot 0.20 + 2 \cdot 0.25 + 3 \cdot 0.05 \\\\E(Y) = 0.85[/tex]
Suppose an individual with Y violations incurs a surcharge of $100Y2. Calculate the expected amount of the surcharge.
The expected amount of the surcharge is given by
[tex]E(100Y^2) = 100E(Y^2)[/tex]
Where
[tex]E(Y^2) = \sum Y^2 \cdot P(Y) \\\\E(Y^2) = 0^2 \cdot 0.50 + 1^2 \cdot 0.20 + 2^2 \cdot 0.25 + 3^2 \cdot 0.05\\\\E(Y^2) = 1.65[/tex]
So, the expected amount of the surcharge is
[tex]E(100Y^2) = 100E(Y^2) \\\\E(100Y^2) = 100 \cdot 1.65 \\\\E(100Y^2) = 165[/tex]
