1. Consider the following recorded data available for a firm regarding the fleet of automobiles and accidental losses and answer the question that follow.
Year
No. of automobiles No. of accidents Monetary loss
1 10 3 Br. 3000
2 13 3 3900
3 16 4 4600
4 19 4 5300
5 22 4 5400
6 23 4 5600
7 27 5 6200
8 30 5 6000
The firm is going to run 35 automobiles next year
A. Determine the probability of an accident and the loss per accident
B. Construct Poisson probability distribution
C. What are the expected number of accidents and that of monetary loss?
D. What is the probability that the firm will face losses totaling 5000 or more?
E. What is the probability that the firm facing some accident?
F. Determine the standard deviation of an accidents and establish the range of an accidents taking 2 SD as a measure of risk
G. Calculate Rm and Rn and interpret the result
H. Compute the standard deviation of monetary loss and establish the range of monetary loss taking 1 SD as a measure of risk
I. Assume the number of exposure units increased to 40,60, and 100 from year 10-12 respectively and show hoe risk decreases with the increase in the number of cars