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1. Suppose that an insurance company classifies people into one of three classes: good risks, average risks,
and bad risks. Their records indicate that the probabilities that good, average, and bad risk persons will be
involved in an accident over a 1-year span are, respectively, 0.05, 0.15, 0.30. If 20 percent of the popula-
tion are good risks, 50 percent are average risks, and 30 percent are bad risks, what proportion of people
have accidents in a fixed year? If policyholder A had no accidents in 1997, what is the probability that he or
she is a good risk?
4. A box contains 4 right-handed and 6 left-handed screws. Two screws are drawn at random. Let X be the
number of left-handed screws drawn. Find the probabilities 𝑃(𝑋 = 0), 𝑃(𝑋 = 1), 𝑃(𝑋 = 2) , 𝑃( 0 <
𝑋 < 2).
7. A total of 4 buses carrying 148 students from the same school arrive at a football stadium. The buses carry,
respectively, 40, 33, 25, and 50 students. One of the students is randomly selected. Let 𝑋 denote the num-
ber of students that were on the bus carrying this randomly selected student. One of the 4 bus drivers is
also randomly selected. Let 𝑌 denote the number of students on her bus. Compute 𝐸[𝑋], 𝐸[𝑌]. Are they
equal?
8. Suppose that two teams play a series of games that ends when one of them has won 𝑖 games. Suppose
that each game is, independently, won by team 𝐴 with probability p. Find the expected number of games
that are played when (a) i = 2 and (b) i = 3.