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ADAPT Practice Problems provided by SALT Solutions Week 11

Difficulty level*is 5.8077747 38% of students taking exam P will pass the exam. 5% of students are taking exam P having used ADAPT. 79% of the students using ADAPT pass the exam. What is the probability of passing the exam if a student does not use ADAPT? A) 0.24 B) 0.27 C) 0.30 D) 0.33 E) 0.36

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 10


Difficulty level*is 4.3161789 An insurance company examines its pool of auto insurance customers and gathers the following information: All customers insure at least one car 75% of customers insure more than 1 car 40% of customers carry collision coverage Of the customers that insure more than one car, 50% carry collision coverage What is the probability that a randomly selected customer insures more than 1 car and doesn't have collision coverage? A) 0.225 B) 0.300 C) 0.375 D) 0.475 E) 0.500

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 9


Difficulty level*is 6.0392305 A drug test yields correct results 90% of the time when a person is using the drug. It yields correct results 95% of the time when a person is not using the drug. It is known that 2% of the population uses the drug. For a randomly selected individual define:

Compute Var(X). A) 0.014 B) 0.048 C) 0.056 D) 0.063 E) 0.177

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 8


Difficulty level*is 6.0392305 In a study of auto accidents involving damage to two autos, the damage to the "at fault" drivers car, , is compared to the damage, , to the other car. The following information is known:

1000 such claims are studied. Let in these 1000 claims.

be the sum of damage to both vehicles

The value P(S<875,000) is closest to which of the following values A) 0.00 B) 0.05 C) 0.10 D) 0.15 E) 0.20

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 7


Difficulty level*is 8.4242641 Let denote the size of a bodily injury claim and denote the size of the

corresponding property damage claim. Let . From prior experience we know Var(X)=144, Var(Y)=64 and Var(X+Y)=308. It is expected that bodily injury claims will rise 10% next year and property damage will rise by a fixed amount of 5. Let injury and property damage. Compute A) 327 B) 343 C) 373 D) 432 E) 441 be the new trial of bodily .

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 6


Difficulty level*is 7.2705960 Let of of A) B) C) D) E) be a random variable with E(X) = 0, Var(X) = 100 and skewness . Find the first four terms in the Taylor Series (up to the . term)

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 5


Difficulty level*is 3.1438016 A homeowner purchases insurance on her house. Let be the amount of

time she has owned the house and be the time until the first claim. and have the following joint distribution:

Compute E(Y).

A) B) C) D) E)

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 4


Difficulty level*is 7.7980626 Claims from Group A follow a normal distribution with mean 10,000 and standard deviation 1,000. Claims from Group B follow a normal distribution with mean 20,000 and standard deviation 2,000. All claim amounts are independent of the other claims. Fifty claims occur in each group. Find the probability the total of the 100 claims exceeds 1,530,000. A) 0.029 B) 0.047 C) 0.067 D) 0.084 E) 0.090

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 3


Difficulty level*is 7.8544004 A company's accident losses in a year follow a distribution with density function

The company purchases an insurance policy with deductible 5 to cover these losses. Compute the variance of the company's loss not covered by insurance. A) 0.53 B) 0.59 C) 0.62 D) 0.64 E) 0.67

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 2


Difficulty level*is 6.9153539 A company classifies drivers as regular, preferred, or ultra-preferred. In the previous year: There were 5 times as many regular drivers as ultra-preferred There were 3 times as many preferred drivers as ultra-preferred 10% of regular drivers had accidents 3% of preferred drivers had accidents 1% of ultra-preferred drivers had accidents Given that an insured had an accident find the probability the driver was classified as preferred. A) 0.02 B) 0.05 C) 0.15 D) 0.32 E) 0.60

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 1


Difficulty level*is 4.0770330 Suppose and have the joint density

Find F(0.3, 0.5) A) 0.037 B) 0.045 C) 0.063 D) 0.072 E) 0.081

*ADAPT questions have a difficulty definition on a scale from 1 to 10 with 1 representing easy and 10 representing very difficult.

ADAPT Practice Problems provided by SALT Solutions Week 11


Event Event Find = using ADAPT = passing the exam

ADAPT Practice Problems provided by SALT Solutions Week 10


We are given that P(more than 1 car)=.75. We are also given that 50% of customers that insure more than 1 car have collision coverage, so 50% of 75%=37.5%. Since the customer can't both have and not have collision coverage, .75=.375+P(more than 1 car and doesn't have collision coverage) Therefore, the probability that a customer doesn't carry collision coverage and insures more than one car is .375

ADAPT Practice Problems provided by SALT Solutions Week 9

Note it wasn't necessary to compute P(Y=0) and P(Y=1) but it was helpful to make sure that the probability that someone in the population used the drug was 2% and making sure that the column added up to be 1. The last row also needs to add up to be 1.

ADAPT Practice Problems provided by SALT Solutions Week 8


Let . Then we need E(A) and Var(A).

Then

once again we need E(S) and Var(S)

We need P(S<875,000)

ADAPT Practice Problems provided by SALT Solutions Week 7


First 308=Var(X)+Var(Y)+2Cov(X,Y) =144+64+2Cov(X,Y) So Cov(X,Y)=50

Note: the addition of 5 has no effect on the covariance So

ADAPT Practice Problems provided by SALT Solutions Week 6


We know

By Taylor's Theorem,

ADAPT Practice Problems provided by SALT Solutions Week 5

ADAPT Practice Problems provided by SALT Solutions Week 4


Let represent the 50 claims from Group A.

Let represent the 50 claims from Group B. Since claim values are independent

x
i =1 50 i =1

50

is normal with mean 50(10, 000) = 500, 000 and variance 50(1000)2 = 50, 000, 000 is normal with mean 50(20, 000) = 1, 000, 000 and variance 50(2000)2 = 200, 000, 000
50

y
So

1 50

xi + yi = L is normal with mean 1,500,000 and variance 250,000,000.


i =1 i =1

ADAPT Practice Problems provided by SALT Solutions Week 3


First we must determine .

Let

= loss not covered by insurance

ADAPT Practice Problems provided by SALT Solutions Week 2


Let A= event a driver is classified as regular B= event a driver is classified as preferred C= event a driver is classified as ultra-preferred D= event a driver has an accident Let . So and

Since all drivers belong to exactly one category

By Baye's rule

ADAPT Practice Problems provided by SALT Solutions Week 1


First we need to find .

So,