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Mathematics, 17.07.2020 21:01 182075
Let X be the damage incurred (in $) in a certain type of accident during a given year. Possible X values are 0, 1000, 5000, and 10000, with probabilities 0.82, 0.09, 0.07, and 0.02, respectively. A particular company offers three different policies: a $200 deductible with a $800 premium, a $500 deductible with a $700 premium, and a $1000 deductible with a $600 premium. (A $Y deductible means the insurance company pays X - Y for X Y and 0 for X Y.) Compute the expected profit for each policy.
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Let X be the damage incurred (in $) in a certain type of accident during a given year. Possible X va...
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