A company rounds its losses to the nearest dollar. The error on each loss is independently and uniformly distributed on [–0.5, 0.5]. If the company rounds 2000 such claims, find the 95th percentile for the sum of the rounding errors.

Answers

Answer 1

Answer:

the 95th percentile for the sum of the rounding errors is 21.236

Step-by-step explanation:

Let consider X to be the rounding errors

Then; [tex]X \sim U (a,b)[/tex]

where;

a = -0.5 and b = 0.5

Also;

Since The error on each loss is independently and uniformly distributed

Then;

[tex]\sum X _1 \sim N ( n \mu , n \sigma^2)[/tex]

where;

n = 2000

Mean [tex]\mu = \dfrac{a+b}{2}[/tex]

[tex]\mu = \dfrac{-0.5+0.5}{2}[/tex]

[tex]\mu =0[/tex]

[tex]\sigma^2 = \dfrac{(b-a)^2}{12}[/tex]

[tex]\sigma^2 = \dfrac{(0.5-(-0.5))^2}{12}[/tex]

[tex]\sigma^2 = \dfrac{(0.5+0.5)^2}{12}[/tex]

[tex]\sigma^2 = \dfrac{(1.0)^2}{12}[/tex]

[tex]\sigma^2 = \dfrac{1}{12}[/tex]

Recall:

[tex]\sum X _1 \sim N ( n \mu , n \sigma^2)[/tex]

[tex]n\mu = 2000 \times 0 = 0[/tex]

[tex]n \sigma^2 = 2000 \times \dfrac{1}{12} = \dfrac{2000}{12}[/tex]

For 95th percentile or below

[tex]P(\overline X < 95}) = P(\dfrac{\overline X - \mu }{\sqrt{{n \sigma^2}}}< \dfrac{P_{95}- 0 } {\sqrt{\dfrac{2000}{12}}}) =0.95[/tex]

[tex]P(Z< \dfrac{P_{95} } {\sqrt{\dfrac{2000}{12}}}) = 0.95[/tex]

[tex]P(Z< \dfrac{P_{95}\sqrt{12} } {\sqrt{{2000}}}) = 0.95[/tex]

[tex]\dfrac{P_{95}\sqrt{12} } {\sqrt{{2000}}} =1- 0.95[/tex]

[tex]\dfrac{P_{95}\sqrt{12} } {\sqrt{{2000}}} = 0.05[/tex]

From Normal table; Z >   1.645 = 0.05

[tex]\dfrac{P_{95}\sqrt{12} } {\sqrt{{2000}}} =1.645[/tex]

[tex]{P_{95}\sqrt{12} } = 1.645 \times {\sqrt{{2000}}}[/tex]

[tex]{P_{95} = \dfrac{1.645 \times {\sqrt{{2000}}} }{\sqrt{12} } }[/tex]

[tex]\mathbf{P_{95} = 21.236}[/tex]

the 95th percentile for the sum of the rounding errors is 21.236


Related Questions

Which of the following investments could be represented by the function A = 250(1 + 0.08/12)12 × 4?

Answers

hello,

the first term is 250 so this is the initial invested amount

[tex](1+\dfrac{0.08}{12})^{12}=(1+\dfrac{8\%}{12})^{12}[/tex]

is to compute 8% annual interest compounded monthly (there are 12 months in a year)

and then multiply by 4 means that it is computed for 4 years so

finally the answer is

$250 is invested at 8% annual interest compounded monthly for 4 years

hope this helps

Represent 1/3 and 5/2 on the same number line.

Answers

Step-by-step explanation:

1/3 and 5/2 can be shown as:

1/3= 3/6 5/2= 15/6

points with 1/6 interval on the number line:

0, 1/6, 2/6, 3/6, 4/6, ..., 15/6

simplifica: 49/90, se puede????

Answers

Answer:

49/90 is simplified

Step-by-step explanation:

Answer:

Step-by-step explanation:

49/90


Which expression is equivalent to

Answers

Answer:

Option 2) [tex]x^{\frac{1}{8}}y^8[/tex]

Step-by-step explanation:

=> [tex](x^{\frac{1}{4} } y ^{16} )^\frac{1}{2}[/tex]

=> [tex]x^{\frac{1}{4} * \frac{1}{2} } * y ^{16*\frac{1}{2} }[/tex]

=> [tex]x^{\frac{1}{8}}y^8[/tex]

assume the graph of a function of the form y=asin(k(x+b)) is given below. which of the following are possible values for a, k, and b?

Answers

Answer:

C

Step-by-step explanation:

Okay, here we have the equation of the sine wave as;

y = asin(k(x + b))

By definition a represents the amplitude

k represents the frequency

b represents the horizontal shift or phase shift

Now let’s take a look at the graph.

By definition, the amplitude is the distance from crest to trough. It is the maximum displacement

From this particular graph, amplitude is 4

K is the frequency and this is 1/period

The period ;

Firstly we find the distance between two nodes here and that is 1/2 from the graph (3/4 to 1/4)

F = 1/T = 1/1/2 = 1/0.5 = 2

b is pi/4 ( phase is positive as it is increasing rightwards)

So the correct option here is C

Answer: it is

a=4, k=2, and b= pi/4

Step-by-step explanation:

got it right on A P E X

The police department uses a formula to determine the speed at which a car was going when the driver applied the breaks, by measuring the distance of the skid marks.The equation d=0.03r^2+r models the distance, d, in feet, r miles per hour (r is the speed of the car) Factor the equation. d=?

Answers

Answer:

0.03 feet

Step-by-step explanation:

d = 0.03r² + r

When d = 0: 0.03r² + r = 0

r(0.03r + 1) = 0

∴ r = 0

When r = 0: d = 0.03 feet

? of 72 = 45 (answer in fraction)

Answers

Answer:

5/8

Step-by-step explanation:

72 = 16/10 of 45

45 = 10/16 = 5/8 of 72

In a game the average score was 60 time score was 5/2 of the average what was Tim’s score?

Answers

Answer:

in my own reasoning not sure if I am correct

Step-by-step explanation:

first it said Tim score was 5/2 of the of the average score

and the average score is 60

so that will be 5/2 × 60 which is

= 150

how to find the angel in trigonometry when all the lengths of the right angled triangle already given.

Answers

Answer:

The three trigonometric ratios can be used to calculate the size of an angle in a right-angled triangle

Use rule ; SOHCAHTOA .Where sin x = opp/hyp

cos x = adj/hyp

tan x= opp/adj

Substitute the given values for the three sides

into any of the above rules

[tex]example = Hyp = 2\\opp = 1\\sin- x = 1/2\\x = sin^{-1} 1/2\\x = 30[/tex]

Step-by-step explanation:

I Hope It Helps :)

What is the 5th equivalent fraction to 1/11 ?

Answers

Answer: 5/55

Step-by-step explanation:

1/11 x 5 = 5/55

So, the fifth equivalent fraction to 1/11 is 5/55.

The 5th equivalent fraction should be [tex]5\div 55[/tex]

Calculation of the equivalent fraction:

Since the fraction is [tex]1\div 11[/tex]

So here the 5th equivalent should be

[tex]= 1\div 11 \times 5\div 5[/tex]

= [tex]5\div 55[/tex]

Here 5 represent the numerator and 55 represent the denominator.

Therefore, we can concluded that The 5th equivalent fraction should be [tex]5\div 55[/tex]

Learn more about fraction here: https://brainly.com/question/1786648

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