Latest MBA Aptitude Question SOLUTION: 66 students of a class are covered under a Health Insurance Scheme for which premium charged is Rs. 5000 per student. Considering the types of coverage in the policy, the probabili

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(#M40014549) MBA question permutations and combinations, probability Keep an EYE

66 students of a class are covered under a Health Insurance Scheme for which premium charged is Rs. 5000 per student. Considering the types of coverage in the policy, the probability that a policy will become a claim policy is estimated to be 0.2. The Insurance Company offering the cover has collected the data related to treatment expenses of various diseases covered under the scheme. Based on this, the claim amount is likely to vary linearly between Rs. 10000 to Rs. 50000. What is the probability that this scheme will result in a loss. The company keeps 20% of the premium amount collected for meeting overhead and other expenses and only 80% is available for claim settlement.The Insurance Company wants to do such business only if the probability of loss is less than or equal to 20%.Is the probability of loss in this case <= 20%. If no, what are your recommendations to keep it within acceptable range?

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