4.5 - Applications of Probability
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Practice Questions
Test your understanding with targeted questions
What is the role of probability in insurance?
💡 Hint: Think about how insurance companies evaluate risk.
How does probability assist in finance?
💡 Hint: Focus on investment decisions based on potential market behavior.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What is the main application of probability in insurance?
💡 Hint: Think about what insurance companies do to manage risk.
True or False: Probability is not relevant in medical testing.
💡 Hint: Consider how tests evaluate conditions.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A company has a 5% chance that a claim will be made each year. If they have 100 customers, what is the expected number of claims they should prepare for?
💡 Hint: Think about the probability formula for expected values.
You want to invest $10,000 in stocks. There's a 70% chance of a 10% increase or a 30% chance of a 20% decrease. What is the expected value of the investment?
💡 Hint: Use the formula for expected value with different outcomes and their probabilities.
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