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Mathematics, 07.12.2020 02:40 EricaCox1

D. To prepare premium rates the amounts customers pay) for an insurance plan, an insurance company conducts an extensive risk study to
determine the probability that a member of a certain group may require
a pay-off. Based on these probabilities, the expected amount of payoff
is charged to the customer as part of the premium. Explain why car
insurance companies charge a higher premium for teenage drivers
with a clean driving record than for adult drivers with a clean driving
record.

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