An insurance company estimates that it should make an annual profit of $150 on each homeowner's policy written,with a standard deviation of $6000.If it writes three of these policies,the mean annual profit for the company is found to be 3 × 150 = 450.The standard deviation of the company's annual profit is found to be
≈ $10,392.What assumptions (if any)underlie the calculation of the mean? of the standard deviation?
A)Mean: that the profit on each policy follows a Normal model Standard deviation: that the policies are independent of one another and that the profit on each policy follows a Normal model
B)Mean: no assumptions required Standard deviation: no assumptions required
C)Mean: no assumptions required Standard deviation: that the policies are independent of one another and that the profit on each policy follows a Normal model
D)Mean: no assumptions required Standard deviation: that the policies are independent of one another
E)Mean: that the policies are independent of one another Standard deviation: that the policies are independent of one another

Question

An insurance company estimates that it should make an annual profit of $150 on each homeowner's policy written,with a standard deviation of $6000.If it writes three of these policies,the mean annual profit for the company is found to be 3 × 150 = 450.The standard deviation of the company's annual profit is found to be 
≈ $10,392.What assumptions (if any)underlie the calculation of the mean? of the standard deviation?
A)Mean: that the profit on each policy follows a Normal model Standard deviation: that the policies are independent of one another and that the profit on each policy follows a Normal model 
B)Mean: no assumptions required Standard deviation: no assumptions required 
C)Mean: no assumptions required Standard deviation: that the policies are independent of one another and that the profit on each policy follows a Normal model 
D)Mean: no assumptions required Standard deviation: that the policies are independent of one another 
E)Mean: that the policies are independent of one another Standard deviation: that the policies are independent of one another

Quizplus · Accepted Answer

The Answer of An insurance company estimates that it should make an annual profit of $150 on each homeowner's policy written,with a standard deviation of $6000.If it writes three of these policies,the mean annual profit for the company is found to be 3 × 150 = 450.The standard deviation of the company's annual profit is found to be 
≈ $10,392.What assumptions (if any)underlie the calculation of the mean? of the standard deviation?
A)Mean: that the profit on each policy follows a Normal model Standard deviation: that the policies are independent of one another and that the profit on each policy follows a Normal model 
B)Mean: no assumptions required Standard deviation: no assumptions required 
C)Mean: no assumptions required Standard deviation: that the policies are independent of one another and that the profit on each policy follows a Normal model 
D)Mean: no assumptions required Standard deviation: that the policies are independent of one another 
E)Mean: that the policies are independent of one another Standard deviation: that the policies are independent of one another

An Insurance Company Estimates That It Should Make an Annual