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X is the probability that an insurance policy will pay off 100 % o
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19 Jan 2023, 10:46
19 Jan 2023, 10:46
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Question Stats:
56% (01:14) correct
43% (01:14) wrong based on 30 sessions
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X is the probability that an insurance policy will pay off 100 % of the value of a claim, and Y is the probability that an insurance policy will pay off 50 % of the value of that claim. No other possible outcomes exist.
A. The quantity in Column A is greater
B. The quantity in Column B is greater
C. The two quantities are equal
D. The relationship cannot be determined from the information given
Quantity A |
Quantity B |
XY |
X-Y |
A. The quantity in Column A is greater
B. The quantity in Column B is greater
C. The two quantities are equal
D. The relationship cannot be determined from the information given
Re: X is the probability that an insurance policy will pay off 100 % o
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18 Feb 2023, 06:53
18 Feb 2023, 06:53
Expert Reply
OE
The only constraints given in the problem are that the probabilities X and Y must sum to 1, because no other possible outcomes exist. However, nothing more is known about the relative size of X and Y. For example, if X = 0.4, then Y = 0.6 and XY is positive while X - Y is negative. By contrast, if X = 0.8, then Y = 0.2, XY =0.16, and X - Y = 0.6.
Therefore, either quantity could be greater. Thus, the relationship cannot be determined from the information given
The only constraints given in the problem are that the probabilities X and Y must sum to 1, because no other possible outcomes exist. However, nothing more is known about the relative size of X and Y. For example, if X = 0.4, then Y = 0.6 and XY is positive while X - Y is negative. By contrast, if X = 0.8, then Y = 0.2, XY =0.16, and X - Y = 0.6.
Therefore, either quantity could be greater. Thus, the relationship cannot be determined from the information given
gmatclubot
Re: X is the probability that an insurance policy will pay off 100 % o [#permalink]
18 Feb 2023, 06:53
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