Mathematics, 18.10.2019 19:20 mandyleu
Apotential customer for an $85,000 fire insurance policy possesses a home in an area that, according to experience, may sustain a total loss in a given year with probability of .001 and a 50% loss with probability .01. ignoring all other partial losses, what premium should the insurance company charge for a yearly policy in order to break even on all $85,000 policies in this area?
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