1. An insurance policy sells for $1000. Based on past data, an average of 1 in 100 policyholders will file a $10,000 claim, an average of 1 in 250 policyholders will file a $40,000 claim, and an average of 1 in 500 policyholders will file an $80,000 claim. Find the expected value (to the company) per policy sold. If the company sells 20,000 policies, what is the expected profit or loss?

2. Did they profit or loss profit? If, so how much?