An insurance company is selling a policy that will pay for at most one accident. For a

Fantastic news! We've Found the answer you've been seeking!

Question:

An insurance company is selling a policy that will pay for at most one accident. For a major accident, the policy pays $7000; for a minor accident, the policy pays $2000. The company estimates that the probability of a major accident is 0.007, and the probability of a minor one is 0.1. What yearly premium should the insurance company charge in order to:

a) break even?

b) have an expected gain of $65?

Posted Date: May 19, 2024 02:06 AM

See More Questions

Bilboa Freightlines, S.A., of Panama, has a small truck that it uses for intracity deliveries. The truck is worn out and must be either overhauled or replaced with a new truck. The company has...
Indicate whether each of the items below is a real or nominal account and whether it appears in the balance sheet or the income statement. (a) Prepaid Rent. (b) Salaries and Wages Payable. (c)...
A steel rod is bent to form a mounting bracket. For each of the mounting brackets and loading shown, determine the reactions at A and B.
How are exchange rates determined?
A man doing push-ups pauses in the position shown in Fig. 9-84. His mass m = 75-kg. Determine the normal force exerted by the floor (a) On each hand; (b) On each foot. 30 cm mg 95 cm + 40 cm-
Research: Utilize statistics, testimonials, and other data to support your points and provide credibility aboy mind matters-youth mental health programs
Which of the following is NOT a generalization found in the limited effects theory? a) There is a two-step flow of media influence b) Media rarely have a direct influence c) When effects occur, they...
Explain how and why physician incompetency is reported.
Describe various forms of elder abuse, how to recognize it, and reporting requirements.
Discuss corporate organization and committee structure.
Explain how consent differs among competent patients, minors, guardians, and incompetent patients.
What elements must be proven in order to be successful in a negligence suit? Illustrate your answer with a case (the facts of the case can be hypothetical).
import javax.swing.*; import java.awt.event.ActionEvent; import java.awt.event.ActionListener; public class FXDorm implements ActionListener { //It Implemented ActionListener to act as per checkbox...
Consider the function f and its graph. a. Estimate the zeros of the area function b. Estimate the points (if any) at which A has a local maximum or minimum. c. Sketch a graph of A, for 0 x 10,...
What would have to be true for the United States to have a balance-of-trade surplus and a current account deficit?
What are exchange rates?
What would have to be true for the United States to have a balance-of-trade deficit and a balance-of-payments surplus?

An insurance company is selling a policy that will pay for at most one accident. For a

Question:

Expert Answer:

Students also viewed these mathematics questions