Question:

An insurance company prices its Tornado Insurance using the

Last updated: 10/18/2023

An insurance company prices its Tornado Insurance using the

An insurance company prices its Tornado Insurance using the following assumptions In any calendar year there can be at most one tornado In any calendar year the probability of a tornado is 0 02 The number of tornadoes in any calendar year is independent of the number of tornados in any other calendar year Using the insurance company s assumptions calculate the probability that there are fewer than 2 tornadoes in a 12 year period Round your answer to four decimal places