An insurance company insures a person's antique coin collection worth $20,000 for an annual premium of...
An insurance company insures a person's antique coin collection worth $20,000 for an annual premium of $300. If the company figures that the probability of the collection being stolen is 0.002, what will be the company's expected profit?
PLEASE CREATE CHART
Homework Answers
The chart is here -
| X | P(X) |
| 300 | 0.998 |
| 0 | 0.002 |
E(X) = Σ X.P(X) = 300*0.998 + 0*0.002 = 299.4 + 0 = 299.4
The expected profit is $299.4.
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