Same car insurance problem as above, but now you are willing to self-insure any losses up...

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Same car insurance problem as above, but now you are willing to self-insure any losses up to $1000 (i.e., have a deductible of $1000). Your maximum coverage is 123 thousand USD, and the probability of losses over the year the following discrete distribution: 1 K: 10% 5 K: 2% 10 K: 1% 50 K: 0.5% 123 K: 0.1% The insurance company wants a 10% premium over expected loss. How much will you have to pay for the policy? Same car insurance problem as above, but now you are willing to self-insure any losses up to $1000 (i.e., have a deductible of $1000). Your maximum coverage is 123 thousand USD, and the probability of losses over the year the following discrete distribution: 1 K: 10% 5 K: 2% 10 K: 1% 50 K: 0.5% 123 K: 0.1% The insurance company wants a 10% premium over expected loss. How much will you have to pay for the policy?

Answer rating: 100% (QA)

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