## Question

###### Suppose that an insurance company classifies people into one of three classes: good risks, average risks and bad risks. The company' s record indicates that the probabilities that good- , average- and bad-risks persons will be involved in an accident over a one- year span are; respectively, 0.1,0.2 and 0.30. Suppose that 20 % of the population is a good risk, 50 %an average risk and 30 % percent a bad riskWhat proportion of people have accidents in a fixed year?b) If policy holder A had no

Suppose that an insurance company classifies people into one of three classes: good risks, average risks and bad risks. The company' s record indicates that the probabilities that good- , average- and bad-risks persons will be involved in an accident over a one- year span are; respectively, 0.1,0.2 and 0.30. Suppose that 20 % of the population is a good risk, 50 %an average risk and 30 % percent a bad risk What proportion of people have accidents in a fixed year? b) If policy holder A had no accidents over the last year; what is the probability that he or she is a bad risk?

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