Ten policyholders file claims with CareFree Insurance.Three of these claims are fraudulent.Claims manager Earl Evans randomly selects three of the ten claims for thorough investigation.If x represents the number of fraudulent claims in Earl's sample, P(x=0)is _______________.
A)0.0083
B)0.3430
C)0.0000
D)0.2917
E)0.8917

Question

Quizplus · Accepted Answer

The probability of selecting 0 fraudulent claims out of 3 when there are 3 fraudulent claims and 7 legitimate claims in total can be calculated using combinations. The total number of ways to select 3 claims out of 10 is 10C3 = 120. The number of ways to select 0 fraudulent claims (thus, all 3 are legitimate) is 7C3 = 35. Therefore, P(x=0) = 35/120 = 0.2917.

Ten Policyholders File Claims with CareFree Insurance