Discuss the following:
Q: Given the following information about motor vehicles, motor vehicle accidents and cost of repair for last year:
of registered motor vehicles (millions) 215
of vehicles involved in an accident (millions) 21.3
Cost of accident ($ billions) 192
A) What is the probability that a randomly selected vehicle is involved in an accident?
B) What type of probability does this illustrate (classical, empirical, subjective)?
C) Suppose your insurance company insures 150,000 motor vehicles this year. How many vehicles insured by your company will be involved in an accident?
D) Estimate the cost of repair per vehicle ($ per vehicle)
E) How much will your company expect to pay for accidents this year?