A company offers a renters insurance policy that costs a customer $70 per year, and the company will make a payout of $10,000 to the customer if they are victim to theft in that year. The company set this
price based on the probability of a theft in the area being 0.002. Let X represent the company's profit
from one of these policies. The table below displays the probability distribution and summary statistics for
X
Theft
No theft
X = profit ($) 70
P(X)
0.998
-9,930
0.002
Mean:
Hex = $50
Ox $447
Standard deviation:
The company is considering increasing the price of this policy by an additional $10. Let Y represent their
profit from one of these higher-priced policies.
What are the mean and standard deviation of Y?
Lly =
dollars
or
dollars