Sweetwater & Associates write weekend trip insurance at a very nominal charge. Records show that the probability that a motorist will have an accident during the weekend and file a claim is 0.00555. Suppose they wrote 400 policies for the coming weekend, what is the probability that exactly two claims will be filed?

Question

Quizplus · Accepted Answer

We can use the binomial distribution with n = 400 and p = 0.00555 to find the probability of exactly two claims being filed:
P(X = 2) = (400 choose 2) * 0.00555^2 * (1 - 0.00555)^(400 - 2) 
= 79,800 * 0.0000308 * 0.9877
= 0.0164 (rounded to 4 decimal places)

Therefore, the answer is C: 0.0164.

Sweetwater & Associates Write Weekend Trip Insurance at a Very