# What is the expected value decision?

**Question description**

got A on last work you did he loves the work in exel with explanation

Evans_2013_Ch11_OCR.pdf

Evans_2013_Ch12_OCR.pdf

11-8: Suppose that a car rental agency offers insurance for a week that
will cost $10 per day. A minor fender bender will cost $1,500, while a
major accident might cost $15,000 in repairs. Without the insurance, you
would be personally liable for any damages. What should you do?
Clearly, there are two decision alternatives: take the insurance or do
not take the insurance.

The uncertain consequences, or events that might occur, are that you
would not be involved in an accident, that you would be involved in a
fender bender, or that you would be involved in a major accident. Assume
that you researched insurance industry statistics and found out that
the probability of major accident is 0.05%, and that the probability of a
fender bender is 0.16%. What is the expected value decision? Would you
choose this? Why or why not? What would be some alternate ways to
evaluate risk?

12-2: Suppose that the service rate to a waiting line system is 10
customers per hour (exponentially distributed). Analyze how the average
waiting time is expected to change as the arrival rate varies from two
to ten customers per hour (exponentially distributed).

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