Expected value The records of a company. Insurance for automobiles show the foll
ID: 3058680 • Letter: E
Question
Expected value
The records of a company. Insurance for automobiles show the following information about accidents. 50% of the insured cars do not participate in accidents, 40% of the insured cars participate in accidents in which the damage to the car is 20% of its market value, 7% of the insured cars participate in accidents in those that the damage to the car is 60% of its market value and in 3% of the car accidents the damage is of such magnitude that it is considered a total loss. What annual premium should the company charge? of insurance for cars with a value of $ 4000 dlls in the market to have an expected profit of zero dollars?
Explanation / Answer
Expected value
The records of a company. Insurance for automobiles show the following information about accidents. 50% of the insured cars do not participate in accidents, 40% of the insured cars participate in accidents in which the damage to the car is 20% of its market value, 7% of the insured cars participate in accidents in those that the damage to the car is 60% of its market value and in 3% of the car accidents the damage is of such magnitude that it is considered a total loss. What annual premium should the company charge? of insurance for cars with a value of $ 4000 dlls in the market to have an expected profit of zero dollars?
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.