Which coverage bid should Mr. Baker select, based on the number of expected claims and the magnitude of these claims. Assume the premiums are paid at the start of year, losses and deductibles are paid at the end of the year, and 7.5 percent is the appropriate interest discount rate. Pricing Strategy AAA insurance company estimates total losses (claims payment) and probabilities for its automobile insurance division is as follows: Calculate Pure Premium (expected claim costs)? Calculate Fair Premium (consider the time value of money!)