*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
*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
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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