An insurance company sells policies to cover car theft. The company estimates that there is a 4%
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An insurance company sells policies to cover car theft. The company estimates that there is a 4% chance of a car being stolen in a given year. The policy costs $300 per year, and if a car is stolen, the company pays out $15,000 to the policyholder. Assume that the number of policies sold is very large. What is the expected value and standard deviation of the insurance company's profit per policy?
Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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