An insurance company sells a policy for $800. There is a 1/20 chance that the insurance company will need to pay $1,000, a 1/50 chance they will need to pay $10,000, and a 1/200 chance they will need to pay $100,000. What is the expected value to the insurance company?

An insurance company sells a policy for $800. There is a 1/20 chance that the insurance company will need to pay $1,000, a 1/50 chance they will need to pay $10,000, and a 1/200 chance they will need to pay $100,000. What is the expected value to the insurance company?

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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