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Business, 06.03.2020 19:31 charati5408

An insurance company sells 1378 policies to cover bicycles against theft for 1 year. It costs $300 to replace a stolen bicycle and the probability of theft is estimated at 0.08. Suppose there is no chance of more than one theft per individual. a. Calculate the expected payout for each policy, to give a breakeven price for each policy. Give your answer to the nearest whole number.

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