Question 6. A box of 10 An insurance company classifies drivers as low-risk if they are accident-free for one year. Past

[answerhappygod]

Question 6 A Box Of 10 An Insurance Company Classifies Drivers As Low Risk If They Are Accident Free For One Year Past 1 (37.33 KiB) Viewed 69 times

Question 6. A box of 10 An insurance company classifies drivers as low-risk if they are accident-free for one year. Past records indicate that 98% of the drivers in the low-risk category (L) will remain in that category the next year, and 78% of the drivers who are not in the low-risk category (L') one year will be in the low-risk category the next year. a. Draw the transition diagram. b. Find the transition matrix. c. If 90% of the drivers in the community are in the low-risk category this year, what is the probability that a driver chosen at random from the community will be in the low-risk category the next year? d. If these probabilities remain valid over a long period of time, what percentage of drivers are expected to be in the low-risk category during any given year? Predstakes the