An individual who has automobile insurance policy from the certain company is randomly chosen. Let Y be the number of moving violations for which the individual was cited throughout the last year. The pmf of Y is:
| y |
0 |
1 |
2 |
3 |
| p(y) |
.55 |
.25 |
.13 |
.07 |
a) Compute E(Y) and V(Y)
b) Suppose the quantity 60Y-40 is added to the customer's premium from the previous year to determine the following year's premium. Find the expected value and variance of the change in the customer's premium for the next year