Financial Risk Manager Part 1
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A company insures male and female drivers. Males have .15 chance of having a claim during a policy period and females have .10 chance of having a claim. If a male and female driver is randomly selected from the population, what is the probability neither one has a claim during the policy period?
Other
Community
NNikitesh
A
73.5%
B
76.5%
C
77.5%
D
85%
Explanation:
These events are independent, so
Explanation:
- Let A be the event that the male driver has a claim: P(A) = 0.15
- Let B be the event that the female driver has a claim: P(B) = 0.10
- The probability that the male driver does NOT have a claim: P(A') = 1 - 0.15 = 0.85
- The probability that the female driver does NOT have a claim: P(B') = 1 - 0.10 = 0.90
- Since the events are independent (the claim status of one driver doesn't affect the other), the probability that neither has a claim is: P(A' and B') = P(A') × P(B') = 0.85 × 0.90 = 0.765 = 76.5%
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