1. An insurer sells a very large number of policies to people with the following loss distribution: $100,000 with probability 0.005 S 60,000 with probability 0.010 Loss S 20,000 with probability 0.020 S 10,000 with probability 0.0 0 with probability 0.915 a. Calculate the expected claim cost per policy b. Assume claims are paid one year after premiums are received and that the in terest rate is 6 percent. Calculate the dis- counted expected claim cost per policy c. Assume that the only administrative cost is the cost of processing an application, which equals $100 per policy, and that the fair profit loading is $50. What is the fair premium