The artist Sandra has insured her concert tour. Insurance agents Beowulf have calculated with a 12% probability
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The artist Sandra has insured her concert tour. Insurance agents Beowulf have calculated with a 12% probability that the tour will be in the red, and that, in such a case, the loss will be distributed g(x) = 5 × 10−7e−5×10−7x. The insurance covers the entire loss. Let X be the payment from Beowulf to Sandra. Beowulf charges their policies at a price of 1.7 times the expected payment, plus 0.1 times the standard deviation. How much are they charging Sandra for her policy?
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