Question

A university bears the yearly medical expenses of each of its employees up to a maximum of Rs. 1000. If the yearly medical expenses of an employee exceed Rs. 1000, then the employee gets the excess amount from an insurance policy up to a maximum of Rs. 500. If the yearly medical expenses of a randomly selected employee has U(250, 1750) distribution and 𝑌 denotes the amount the employee gets from the insurance policy, then which of the following statements is/are true ?

• A. $E(Y)=\frac{500}{3}$
• B. $P(Y>300)=\frac{3}{10}$
• C. The median of Y is zero
• D. The quantile of order 0.6 for Y equals 100

Answer 1

Answer: (A), (B), (C)

$E(Y)=\frac{500}{3}$

Answer 2

The correct option is (A) : $E(Y)=\frac{500}{3}$, (B) : $P(Y>300)=\frac{3}{10}$ and (C) : The median of Y is zero.