The probability distribution for damage claims
Question
The probability distribution for damage claims paid by the Newton Automobile Insurance Company on collision insurance is given by:
Payment($) /// Probability
0 0.85
500 0.04
1000 0.04
3000 0.03
5000 0.02
8000 0.01
10000 0.01
a. Compute the expected value of the damage claims.
b) Compute the standard deviation of damage claims.
