Answered

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An insurance policy sells for $300. Based on past data an average of 1 in 100
policyholders will file a $10,000 claim, an average of 1 in 250 policyholders will file a
$25,000 claim, and an average of 1 in 500 policyholders will file a $50,000 claim. What
is the expected value to the insurance company? If the company sells 20,000 policies,
what is the expected profit or loss?

Sagot :

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