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Probability Question, conditional probability, please help!?
Please look at the UPDATE section to read the question, as Yahoo Answers is being retarded
Whenever a particular insurance company accepts a new customer for accident insurance
(with a 1 year term) it classifies the person as low-risk or high-risk. The company reckons
that the probability of an accident occurring during the year is 0.1 for a low-risk and 0.35
for a high-risk customer. Of the people accepted 25% are low-risk and the rest are high-risk.
Given that a customer had an accident during the year,what is the probability of this
person to have been classified as high-risk?
2 Answers
- ?Lv 74 years agoFavorite Answer
P(low risk and accident) = 0.25 * 0.1 = 0.025
P(high risk and accident) = 0.75 * 0.35 = 0.2625
P(accident) = 0.025 + 0.2625 = 0.2875
P(high risk | accident)
= P(high risk and accident) / P(accident)
= 0.2625 / 0.2875
= 0.913
= 91.3%
