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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.

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.

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:

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

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:

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

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 .

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)

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)

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

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

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

Difficulty level*is 4.0770330 Suppose and have the joint density

Event Event Find = using ADAPT = passing the exam

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

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.

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

Then

We need P(S<875,000)

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

We know

By Taylor's Theorem,

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

i =1 i =1

First we must determine .

Let

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

By Baye's rule

First we need to find .

So,

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