Suppose a company charges an annual premium of $475 for a fire insurance policy. in case of a fire claim, the company will pay out an average of $100,000. Based on acturial studies, it determines that the probability of a fire claim in a year is about 0.004. 1) what is the expected annual profit of a fire insurance policy for the company? 2) What annual profit can the company expect if it issues 1000 policies?

Suppose a company charges an annual premium of $475 for a fire insurance policy. in case of a fire claim, the company will pay out an average of $100,000. Based on acturial studies, it determines that the probability of a fire claim in a year is about 0.004. 1) what is the expected annual profit of a fire insurance policy for the company? 2) What annual profit can the company expect if it issues 1000 policies?

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Description: Suppose a company charges an annual premium of $475 for a fire insurance policy. in case of a fire claim, the company will pay out an average of $100,000. Based on acturial studies, it determines that the probability of a fire claim in a year is abou

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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