An insurance policy sells for $1000. Based on past data, an average of 1 in 50 policyholders will file a $10,000 claim, an average of 1 in 200 policyholders will file a$40,000 claim, and an average of 1 in 400 policyholders will file a $60,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss
An insurance policy sells for $1000. Based on past data, an average of 1 in 50 policyholders will file a $10,000 claim, an average of 1 in 200 policyholders will file a$40,000 claim, and an average of 1 in 400 policyholders will file a $60,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section10.8: Probability
Problem 68E
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An insurance policy sells for $1000. Based on past data, an average of 1 in 50 policyholders will file a $10,000 claim, an average of 1 in 200 policyholders will file a
$40,000 claim, and an average of 1 in 400 policyholders will file a $60,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss?
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