An auto insurance company charges younger driver a higher premium than it does elder drivers because younger drivers as

An auto insurance company charges younger driver a higher premium than it does elder
drivers because younger drivers as a rou

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An auto insurance company charges younger driver a higher premium than it does elder drivers because younger drivers as a roup tend to have more accidents. The company has 3 age groups: Group A includes those less than 25 years old, 22% of all its policyholders, Group B includes those 25-39 years old, 43% of all its policyholders. Group C includes those 40 years old and older. Company records show that in any given one-year period, 11% of its Group A policyholders have an accident. The percentages for groups B and C are 3% and 2% respectively. (ii) What is the probability that the company's policyholders are expected to have an accident during the next 12 months? a) b) Suppose Mr.X has just had a car accident. If he is one of the company's policyholders, what is the probability that he is under 25?

 


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