An insurance company writes policies for 5000 newly-licensed drivers each year. Suppose 35% of these are low-risk drivers, 50% are moderate-risk, and 15% are high risk. The company has no way to know which group any individual driver falls in when it writes the policies. 10% of the low-risk drivers will have an at-fault accident (as opposed to a no-fault accident) in the next year, but 40% of the moderate-risk and 50% of the high-risk drivers will have an at-fault accident. Given that a driver has an at-fault accident in the next year, what is the probability that he or she is high-risk? (Hint: use your percentages to make a two-way table with risk level as your columns and at fault/no-fault accidents as your rows, and 5000 as your total number of people in the table.) .37 .21 .24 .50
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- Low-risk drivers: \( 35\% \times 5000 = 1750 \) - Moderate-risk drivers: \( 50\% \times 5000 = 2500 \) - High-risk drivers: \( 15\% \times 5000 = 750 \) Show more…
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