The city of İzmir is prone to three main types of natural hazards: earthquakes, winds and floods. Each of these can be modelled as a Poisson process. The mean annual occurrence rates for earthquakes and floods are 0.1 and 0.25 damaging events, respectively. The wind is considered as a hazard when the speed exceeds 40m/s. The probability distribution for the annual wind speed is known to be lognormal with a median of 30m/s and a coefficient of variation 0.2. All the three hazardous events occur independently of each other, and each can cause damages with an approximate cost of 2M TL. For proper budgeting, the municipality of İzmir needs to calculate the expected monetary loss from natural hazards, and approximately estimates the loss as a product of the number of hazardous events and the related cost. Based on this data, find out: a) What is the return period of a hazardous wind? b) What is the probability that more than 3 hazardous events in total can happen within a year? c) What is the probability that no hazardous events can happen within 5 years? d) Provide estimates for the mean and standard deviation of expected annual monetary losses so as to have an idea about how much budget the municipality should allocate for natural hazards.
