Question

he storm NJ manufacturers offers insurance amage X after a recent storm followed the distribution with CDF, in $10 against storm damage to home owners. T 00, F(x) 1-e-(/120)3 for> o Name this distribution and write down its density f(x), with support, ECX) and a. VARCX). Consult tables! Determine the instantaneous hazard (using formula sheet!) of the storm damage X b. Explain what 2(x) means in this problem. What happens when the storm damage increases? c. If NJ Manufacturers pays only 7 $1000 for any damage beyond $7,000, that is it pays Y-X ifX 7 and pays Y=7 if X > 7. Write down the CDF of Y, and draw it. Then set up the formula for computing E(Y). You need not compute the integral involved, but you can compute the remaining part. d. Compute the conditional probability P(X> 120 | X100]. Leave it as aformula till yo finish working on all other problems.

Answer 1