The Question : An insurance company believes that people can be divided into two classes: those who are accident prone and those who are not. The company’s statistics show that an accident-prone person will have an accident at sometime within a fixed one-year period with probability 0.6, whereas this probability is 0.2 for a person who is not accident prone. The company knows that 20 percent of the population is accident prone.Based on the given information, answer the following questions:(i) What is the probability that a new policyholder will have an accident within a year of purchasing a policy?(ii) Suppose that a new policyholder has an accident within a year of purchasing a policy. What is the probability that he or she is accident prone?
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