SOLUTION: How do you solve:
An insurance company will insure a $220,00 home for its total value for an annual premium of $510. If the company spends $30 per year to service such a policy,
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An insurance company will insure a $220,00 home for its total value for an annual premium of $510. If the company spends $30 per year to service such a policy,
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Question 372450: How do you solve:
An insurance company will insure a $220,00 home for its total value for an annual premium of $510. If the company spends $30 per year to service such a policy, the probability of total loss for such a home in a given year is 0.001 and you assume either total loss or no loss will occur, what is the company's expected annual gain (or profit) on each such policy?
Thank you! Answer by edjones(8007) (Show Source):
