Amount of claim (to the nearest $50,000) Probability The table shows claims and their probabilities for an insurance company. Use the table to answer parts a through c. 0.65 $50,000 $100,000 $150,000...

Amount of claim<br>(to the nearest<br>$50,000)<br>Probability<br>The table shows claims and their<br>probabilities for an insurance<br>company. Use the table to answer<br>parts a through c.<br>0.65<br>$50,000<br>$100,000<br>$150,000<br>$200,000<br>$250,000<br>0.26<br>0.05<br>0.02<br>0.01<br>0,01<br>a. Calculate the expected value.<br>b. How much should the company charge as an average premium so that it breaks even on its claim costs?<br>c. How much should the company charge to make a profit of $50 per policy?<br>

Extracted text: Amount of claim (to the nearest $50,000) Probability The table shows claims and their probabilities for an insurance company. Use the table to answer parts a through c. 0.65 $50,000 $100,000 $150,000 $200,000 $250,000 0.26 0.05 0.02 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 $50 per policy?

Jun 09, 2022

SOLUTION.PDF

Amount of claim (to the nearest $50,000) Probability The table shows claims and their probabilities for an insurance company. Use the table to answer parts a through c. 0.65 $50,000 $100,000 $150,000...

Get Answer To This Question

Related Questions & Answers

Submit New Assignment