I need help with the following questions:
1. A bank typically makes 1,500 transactions per month. An auditor takes a sample of 25 large transactions made during the month. There is a 10% chance of procedural error, what is the probability that the auditor finds more than 2 transactions with procedural error?
2. An airline deliberately overbooks flights as they know 75% of passengers show up for its flights. It flies small planes that carry only 20 passengers. If the airline allows 26 passengers to book, what is the probability that the flight will be overbooked?
3. An insurance company offers 2 policies that cover the cost of repairs from accidents. Policy A costs £700 per year with £800 excess, whilst Policy B costs £2,800 per year with £400 excess. If the number of accidents are modelled as a Poisson Random Variable with mean (u), When is Policy A cheaper on average?
- The answer is in the form: "Policy A is cheaper on average as long as the driver has __________ (2 d.p) accidents a year or fewer.
