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Decision of Uncertainty

In: Business and Management

Submitted By poochie
Words 1011
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Decision: Should I purchase Car Insurance on a Rental Car
For every trip I take, I normally rent a car and have always purchased the rental car insurance coverage rental cars offer. Hertz provides economical rental plan of $9.99 per day for four day week rate in comparison to other car rental services. Expenses for extension exceeding reservation of car follow the rate of $17.99 per day along with tax charges of $3.00 per day. Insurance rate of accidence of body/collision is $12.99/day extra. Insurance amount will be reduced by $500.00 for any cases of accident in the claim. The decision of uncertainly in the present case requires selection between personal and car rental service provided insurance through application of probability concept.
Research
“Car Accident Statistics, Stats, Auto, Fatal, and Drunk Driving” provides the figure for probabilistic estimation of accidents as the chances of one in 16 cars being the case of collision. Once I got the data for odds of accidents, I focused on accurately interpreting my data to make right decision. I have to find the prediction of advantages of choosing car rental insurance over covering the claim in personal policy in forthcoming section.
Interpretation of Data Applying Bayes’ Theorem I chose to use Bayes' theorem as the probability model to interpret my data because it is most applicable to my 2100 mile rental insurance decision. The Bayes' theorem emulates the process of logical inference by determining the degree of confidence in possible conclusions based on the available evidence (Lind, Marchal & Wathen, 2008). Furthermore, this evidence is best stated in terms of subjective probability, where the probability is based on evaluating opinions and information, then estimating this data and finally assigning probability to the outcomes. Therefore, Bayes' theorem is best used for the purpose of predicting

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