Suppose the number of accidents at a location in a week is a

Suppose the number of accidents at a location in a week is a Poisson random variable with parameter = 2.3 and the amount of damage in these accidents are i.i.d. with mean 2,500. Suppose the amount of damage in each accident is independent of the number of accidents in a week. Find the expected value of the total amount of damages in all accidents in a week.

Solution

The variance is 2.3.