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There is a 1% chance that a house burns down within the year. It will cost $120,000.00 to rebuild the home. A fire insurance policy has an annual premium of $700.00. What is the expected value from the standpoint of the insurance company? Enter expected value What is the expected value from the standpoint of the customer?

There is a 1% chance that a house burns down within the year. It will cost $120,000.00 to rebuild the home. A fire insurance policy has an annual premium of $700.00. What is the expected value from the standpoint of the insurance company? Enter expected value What is the expected value from the standpoint of the customer?

Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section10.8: Probability
Problem 69E
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There is a 1% chance that a house burns down within the year. It will cost $120,000.00 to rebuild the home. A fire insurance policy has an annual premium of $700.00. What is the expected value from the standpoint of the insurance company? Enter expected value $ What is the expected value from the standpoint of the customer? Enter expected value $ CHECK ANSWER
Transcribed Image Text:There is a 1% chance that a house burns down within the year. It will cost $120,000.00 to rebuild the home. A fire insurance policy has an annual premium of $700.00. What is the expected value from the standpoint of the insurance company? Enter expected value $ What is the expected value from the standpoint of the customer? Enter expected value $ CHECK ANSWER
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