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Your insurance company has converged for three types of cars. The annual cost for each type...

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Statistics

Your insurance company has converged for three types of cars.The annual cost for each type of cars can be modeled using Gaussian(Normal) distribution, with the following parameters: (Discussionsallowed!)

  • Car type 1 Mean=$520 and Standard Deviation=$110
  • Car type 2 Mean=$720 and Standard Deviation=$170
  • Car type 3 Mean=$470 and Standard Deviation=$80

Use Random number generator and simulate 1000 long columns, foreach of the three cases. Example: for the Car type 1, use Number ofvariables=1, Number of random numbers=1000, Distribution=Normal,Mean=520 and Standard deviation=110, and leave random Seedempty.

Next: use either sorting to construct the appropriate histogramor rule of thumb to answer the questions:

13. What is approximate probability that Car Type 1 hasannual cost less than $550?

  • a. Between 10% and 13%
  • b. Between 23% and 29%
  • c. Between 55% and 70%
  • d. None of these

14. Which of the three types of cars is most likely tocost more than $1000?

  • a. Type 1
  • b. Type 2
  • c. Type 3

15. For which of the three types we have the highestaverage cost?

  • a. Type 1
  • b. Type 2
  • c. Type 3

Answer & Explanation Solved by verified expert
4.2 Ratings (862 Votes)
The random number of car type 1 is generated in excel byfollowing these stepsStep 1 DATA Data Analysis Random number    See Answer
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