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Mathematics Tutors

Subject Mathematics
Due By (Pacific Time) 12/11/2016 01:00 pm

 

Solve Problem and Applications: ch11- prob 8, in your textbook.

11-8: Suppose that a car rental agency offers insurance for a week that will cost $10 per day. A minor fender bender will cost $1,500, while a major accident might cost $15,000 in repairs. Without the insurance, you would be personally liable for any damages. What should you do? Clearly, there are two decision alternatives: take the insurance or do not take the insurance.

The uncertain consequences, or events that might occur, are that you would not be involved in an accident, that you would be involved in a fender bender, or that you would be involved in a major accident. Assume that you researched insurance industry statistics and found out that the probability of major accident is 0.05%, and that the probability of a fender bender is 0.16%.

What is the expected value to take insurance?

 

 

A.10.0

 

B.70.0

 

C.700.0

 

D.0.0

 

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Question 2 of 5

20.0 Points

Solve Problem and Applications: ch11- prob 8, in your textbook.

11-8: Suppose that a car rental agency offers insurance for a week that will cost $10 per day. A minor fender bender will cost $1,500, while a major accident might cost $15,000 in repairs. Without the insurance, you would be personally liable for any damages. What should you do? Clearly, there are two decision alternatives: take the insurance or do not take the insurance.

The uncertain consequences, or events that might occur, are that you would not be involved in an accident, that you would be involved in a fender bender, or that you would be involved in a major accident. Assume that you researched insurance industry statistics and found out that the probability of major accident is 0.05%, and that the probability of a fender bender is 0.16%.

What is the expected value to decline insurance?

 

 

A.10.0

 

B.9.90

 

C.0.0

 

D.70.0

 

Reset Selection

Question 3 of 5

20.0 Points

Solve Problem and Applications: ch11- prob 8, in your textbook.

11-8: Suppose that a car rental agency offers insurance for a week that will cost $10 per day. A minor fender bender will cost $1,500, while a major accident might cost $15,000 in repairs. Without the insurance, you would be personally liable for any damages. What should you do? Clearly, there are two decision alternatives: take the insurance or do not take the insurance.

The uncertain consequences, or events that might occur, are that you would not be involved in an accident, that you would be involved in a fender bender, or that you would be involved in a major accident. Assume that you researched insurance industry statistics and found out that the probability of major accident is 0.05%, and that the probability of a fender bender is 0.16%.

What is the probability of no accident?

 

 

A.5%

 

B.16%

 

C.99.79%

 

D.0.0%

 

Reset Selection

Question 4 of 5

20.0 Points

Solve Problem and Applications: ch11- prob 8, in your textbook.

11-8: Suppose that a car rental agency offers insurance for a week that will cost $10 per day. A minor fender bender will cost $1,500, while a major accident might cost $15,000 in repairs. Without the insurance, you would be personally liable for any damages. What should you do? Clearly, there are two decision alternatives: take the insurance or do not take the insurance.

The uncertain consequences, or events that might occur, are that you would not be involved in an accident, that you would be involved in a fender bender, or that you would be involved in a major accident. Assume that you researched insurance industry statistics and found out that the probability of major accident is 0.05%, and that the probability of a fender bender is 0.16%.

What is the probability of a major accident?

 

 

A.0.05%

 

B.16%

 

C.66.79%

 

D.1.0%

 

Reset Selection

Question 5 of 5

20.0 Points

Solve Problem and Applications: ch11- prob 8, in your textbook.

11-8: Suppose that a car rental agency offers insurance for a week that will cost $10 per day. A minor fender bender will cost $1,500, while a major accident might cost $15,000 in repairs. Without the insurance, you would be personally liable for any damages. What should you do? Clearly, there are two decision alternatives: take the insurance or do not take the insurance.

The uncertain consequences, or events that might occur, are that you would not be involved in an accident, that you would be involved in a fender bender, or that you would be involved in a major accident. Assume that you researched insurance industry statistics and found out that the probability of major accident is 0.05%, and that the probability of a fender bender is 0.16%

What is the best expected value decision?

 

 

A.Take insurance

 

B.Decline insurance

 

Reset Selection

 

 

 

 

 

Question 1 of 5

20.0 Points

 

The three types of inputs common to decision models are: Data, uncontrollable variables, and decision variables.

 

 

 

 

 

True

False

Question 2 of 5

20.0 Points

     

 

Describe how to use Excel data tables, Scenario Manager, and goal seek tools to analyze decision models.

 

 

 

 

 

A.These tools are used to see the effects of one or two variables on a formula by changing the values in cells to see how those changes will affect the outcome of formulas on the worksheet.

 

B.These tools are used to cf formulas on the create formulas in a worksheet.

 

C.These tools are used to see verify models in excel sheets

 

D.All the above

 

Question 3 of 5

20.0 Points

     

 

What-if analysis is the process of changing the values in cells to see how those changes will affect the outcome of formulas on the worksheet.

 

 

 

 

 

True

False

20.0 Points

 

Explain the concept of risk analysis and how Monte Carlo simulation can provide useful information for making decisions.

 

 

 

 

 

A.Risk analysis is about going out o business. Monte Carlo simulation is a place in Europe

 

B.Risk analysis is about taking risks in life by using Monte Carlo method

 

C.Risk analysis is a study of uncertainties in business to estimate the impact. Monte Carlo simulation methods rely on random sampling where samples are "plugged into" a mathematical model and used to calculate outcomes of interest.

 

Question 5 of 5

20.0 Points

     

 

With Solver in Excel [Solver add-in], you can find an optimal value for a formula in one cell (objective cell), while being subject to constraints based on values of other formula cells in a worksheet.

 

 

 

 

 

True

False

 

 

 

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