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The probability distribution for damage claims paid by the Newton Automobile Insurance Company on collision insurance follows. Payment ($) Probability 0 500 , the insurance - Select your answer - 1,000 3,000 5,000 Select your answer against a large loss. 8,000 $ Why does the policyholder purchase a collision policy with this expected value? The policyholder is concerned that an accident will result in a big repair bill if there-Select your answer - V 0.80 0.09 0.01 10,000 0.01 a. Use the expected collision payment to determine the collision insurance premium that would enable the company to break even. $ 0.04 0.03 b. The insurance company charges an annual rate of $572 for the collision coverage. What is the expected value of the collision policy for a policyholder? (Hint: It is the expected payments from the company minus the cost of coverage.) Enter negative values as negative numbers. 0.02 insurance coverage. So even though the policyholder has an expected annual loss of $

The probability distribution for damage claims paid by the Newton Automobile Insurance Company on collision insurance follows. Payment ($) Probability 0 500 , the insurance - Select your answer - 1,000 3,000 5,000 Select your answer against a large loss. 8,000 $ Why does the policyholder purchase a collision policy with this expected value? The policyholder is concerned that an accident will result in a big repair bill if there-Select your answer - V 0.80 0.09 0.01 10,000 0.01 a. Use the expected collision payment to determine the collision insurance premium that would enable the company to break even. $ 0.04 0.03 b. The insurance company charges an annual rate of $572 for the collision coverage. What is the expected value of the collision policy for a policyholder? (Hint: It is the expected payments from the company minus the cost of coverage.) Enter negative values as negative numbers. 0.02 insurance coverage. So even though the policyholder has an expected annual loss of $

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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The probability distribution for damage claims paid by the Newton Automobile Insurance Company on collision insurance follows. Probability Payment ($) 0 500 , the insurance - Select your answer - Select your answer 0.80 1,000 3,000 5,000 8,000 10,000 0.01 a. Use the expected collision payment to determine the collision insurance premium that would enable the company to break even. $ $ Why does the policyholder purchase a collision policy with this expected value? The policyholder is concerned that an accident will result in a big repair bill if there - Select your answer - V against a large loss. 0.09 0.04 0.03 0.02 b. The insurance company charges an annual rate of $572 for the collision coverage. What is the expected value of the collision policy for a policyholder? (Hint: It is the expected payments from the company minus the cost of coverage.) Enter negative values as negative numbers. 0.01 insurance coverage. So even though the policyholder has an expected annual loss of $
Transcribed Image Text:The probability distribution for damage claims paid by the Newton Automobile Insurance Company on collision insurance follows. Probability Payment ($) 0 500 , the insurance - Select your answer - Select your answer 0.80 1,000 3,000 5,000 8,000 10,000 0.01 a. Use the expected collision payment to determine the collision insurance premium that would enable the company to break even. $ $ Why does the policyholder purchase a collision policy with this expected value? The policyholder is concerned that an accident will result in a big repair bill if there - Select your answer - V against a large loss. 0.09 0.04 0.03 0.02 b. The insurance company charges an annual rate of $572 for the collision coverage. What is the expected value of the collision policy for a policyholder? (Hint: It is the expected payments from the company minus the cost of coverage.) Enter negative values as negative numbers. 0.01 insurance coverage. So even though the policyholder has an expected annual loss of $
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