My Math Forum Expected value with constant c

 Algebra Pre-Algebra and Basic Algebra Math Forum

 March 2nd, 2014, 02:46 PM #1 Senior Member   Joined: Jan 2014 Posts: 196 Thanks: 3 Expected value with constant c An insurance company sells an automobile policy with a deductible of one unit. Let X be the amount of the loss having the p.m.f. $f(x)= \{^{.9 , x=0}_{\frac{c}{x} , x=1,2,3,4,5,6,}$ would this be set up as $c(.9) + c\sum_{x=1}^6 1/x$ ? If so, what should this all be equal to in order to find the constant $c$?? Thanks!
 March 2nd, 2014, 05:13 PM #2 Math Team   Joined: Sep 2007 Posts: 2,409 Thanks: 6 Re: Expected value with constant c I presume that when you say "set up as" you mean that is the sum of the probabilities. Of course such a sum must be equal to 1. But when x= 0, there is no "c". The probability when x= 0 is just .9, not .9c. So the sum is $.9+ \sum_{x= 1}^6 \frac{c}{x}= .9+ c\sum_{x= 1}^6\frac{1}{x}= .9+ c(1+ \frac{1}{2}+ \frac{1}{3}+ \frac{1}{4}+ \frac{1}{5}+ \frac{1}{6})= 1$. Solve that for c.
 March 2nd, 2014, 05:16 PM #3 Math Team   Joined: Sep 2007 Posts: 2,409 Thanks: 6 Re: Expected value with constant c I presume that when you say "set up as" you mean that is the sum of the probabilities. Of course such a sum must be equal to 1. But when x= 0, there is no "c". The probability when x= 0 is just .9, not .9c. So the sum is $.9+ \sum_{x= 1}^6 \frac{c}{x}= .9+ c\sum_{x= 1}^6\frac{1}{x}= .9+ c(1+ \frac{1}{2}+ \frac{1}{3}+ \frac{1}{4}+ \frac{1}{5}+ \frac{1}{6})= 1$. Solve that for c.
 March 4th, 2014, 08:03 AM #4 Senior Member   Joined: Jan 2014 Posts: 196 Thanks: 3 Re: Expected value with constant c So the part of the question asking the expected value that the insurance company must pay is 1?
 March 5th, 2014, 06:16 PM #5 Senior Member   Joined: Jan 2014 Posts: 196 Thanks: 3 Re: Expected value with constant c The last part states to determine $c$ and the expected value that the insurance company must pay. so for $c=1/9800$, what do I do w/ this constant to figure out what the insurance company actually pays? Thanks!
 March 6th, 2014, 12:20 AM #6 Senior Member   Joined: Jan 2014 Posts: 196 Thanks: 3 Re: Expected value with constant c Or is this the amount times one unit?

 Tags constant, expected

,

,

,

,

,

,

,

# an insurance company sells an auto

Click on a term to search for related topics.
 Thread Tools Display Modes Linear Mode

 Similar Threads Thread Thread Starter Forum Replies Last Post mathbalarka Real Analysis 3 June 26th, 2013 11:38 PM FreaKariDunk Real Analysis 5 November 20th, 2012 01:00 PM mhhjti Calculus 1 November 15th, 2011 09:43 AM JamieStarr Algebra 3 November 24th, 2010 03:18 PM namarsha Real Analysis 1 October 16th, 2009 09:24 AM

 Contact - Home - Forums - Cryptocurrency Forum - Top