*20. The table shows claims and their probabilities for an insurance company. Amount of Claim $0 $50,000 $100,000 $150,000 $200,000 $250,000 Probability 0.60 0.25 0.09 0.04 0.01 0.01 (a) Calculate the expected value. (b) How much should the company charge as an average premium so that it breaks even on its claim costs? (c) How much should the company charge to make a profit of $140 per policy? OA. (a) $32,000 (b) $16,000 (c) 16,140 OB. (a) $32,000 (b) $32,000 (c) 32,140 OC. (a) $16,000 (b) $32,000 (c) 32,140 OD. (a) $32,000 (b) $16,000 (c) 32,140

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Please help me solve a,b, & c!
*20. The table shows claims and their probabilities for an
insurance company.
Amount of Claim
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Probability
0.60
0.25
0.09
0,04
0.01
0.01
(a) Calculate the expected value.
(b) How much should the company charge as an average
premium so that it breaks even on its claim costs?
charge to make a profit
(c) How much should the company
of $140 per policy?
https://xlitemprod.pearsoncmg.com/api/v1/print/highered
OA. (a) $32,000 (b) $16,000 (c) 16,140
OB. (a) $32,000 (b) $32,000 (c) 32,140
OC. (a) $16,000 (b) $32,000 (c) 32,140
OD. (a) $32,000 (b) $16,000 (c) 32,140
7/9
Transcribed Image Text:*20. The table shows claims and their probabilities for an insurance company. Amount of Claim $0 $50,000 $100,000 $150,000 $200,000 $250,000 Probability 0.60 0.25 0.09 0,04 0.01 0.01 (a) Calculate the expected value. (b) How much should the company charge as an average premium so that it breaks even on its claim costs? charge to make a profit (c) How much should the company of $140 per policy? https://xlitemprod.pearsoncmg.com/api/v1/print/highered OA. (a) $32,000 (b) $16,000 (c) 16,140 OB. (a) $32,000 (b) $32,000 (c) 32,140 OC. (a) $16,000 (b) $32,000 (c) 32,140 OD. (a) $32,000 (b) $16,000 (c) 32,140 7/9
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